The result of the election for the German parliament (Bundestag) on Sunday can be interpreted in only one way: policies based on welfare cuts and the re-division of social wealth to benefit the rich have met with bitter resistance from the German population and been vigorously rejected.

Federal Chancellor Gerhard Schröder had arranged the early election in order to create a stable parliamentary majority for the implementation of his thoroughly unpopular program of welfare cuts—the Agenda 2010. To this end, he received support from all of the parties represented in the Bundestag, from the German president, the Federal Constitutional Court and the entire economic and political elite.

The governing Social Democratic Party (SPD)-Green Party coalition was to receive a new mandate and critics of government policy from inside the ruling parties were to be silenced, or power would be handed over to the conservative opposition, consisting of the Christian Democratic Union (CDU) and Christian Social Union (CSU), and the “free market” Free Democratic Party (FDP).

Now just the opposite has occurred. The election result has resulted in a parliamentary majority which is even more precarious, and has made clear that the prevailing policy of “free market” reforms is rejected by the majority of the population. Political crises as well as violent social conflicts are the inevitable outcome.

This was already foreshadowed on the evening of the election when—for the first time in the history of the German Federal Republic—two candidates, Angela Merkel (CDU) and the incumbent chancellor, Schröder (SPD), both claimed victory and both said they were determined to assume the post of chancellor in the new government.

When polling stations closed on Sunday at 6 p.m. and the first prognoses were published, the result came as a shock to representatives of the CDU/CSU as well as to professional public opinion analysts. The “Union” parties, which were set to win well over 40 percent according to all polls taken prior to the vote, received just 35 percent. This figure was confirmed in the course of the evening. The Union parties’ supposedly impregnable advantage over the SPD—22 percent points in the middle of June—had shrunk to just one percent.

The SPD fared better than it itself had expected just a few weeks ago. Nevertheless, the party was the clear loser in the election, its vote declining more than 4 percent compared to the Bundestag election three years previously. It obtained a bit less than 34 percent, one of the worst results in its history. The Greens suffered slight losses, receiving 8 percent of the vote.

The Union parties were unable to profit from the losses in the government camp. The CDU lost 3 percent of its total compared to the last election, while the CSU, which is based in Bavaria and runs candidates only in that state, lost as much as 10 percent. For the first time in Germany’s post-war history, the two so-called “people’s parties,” the SPD and the Union, polled a combined vote of less than 70 percent.

With just 10 percent, the FDP obtained one of its best ever results. It received many so-called “second ballot” votes from Union voters who sought to prevent a “grand coalition” of the SPD and CDU. Nevertheless, the combined vote for the Union and FDP was less than their total at the last Bundestag election, when they only narrowly failed to poll more than the SPD-Green camp. Tipped as sure winners of the election, the Union and FDP only polled 45 percent of the vote.

The party that registered the biggest increase in support was the recently formed Left Party. In 2002, the Party of Democratic Socialism (PDS—successor party to the Stalinist ruling party of the former East Germany) failed to gain the five percent minimum necessary under German electoral law for admission to parliament. Now standing as the Left Party (following a fusion with the West German-based Election Alternative group) its candidates more than doubled their vote to nearly nine percent, and the merged party will control a significant fraction of deputies in the new parliament.

In the former East Germany, where the PDS had its main base of support, the Left Party received 27 percent—on a level with the vote for the CDU—while the SPD won the largest share of the vote, with 33 percent. In the states of former West Germany, the Left Party won slightly less than five percent of the vote.

All in all, the election result indicates a clear shift to the left within the electorate. The Union and FDP notched up just 45 percent, compared to 51 percent for the governing parties plus the Left Party. The remaining 4 percent of the vote was divided amongst smaller parties which will not be represented in the Bundestag.

This shift to the left became increasingly evident as social questions moved to the center of the election debate. Initially, the Union had been able to profit from popular discontent with the Schröder government, but its own ratings sank when the public became clearer about what the Union itself was proposing in terms of social policy.

In particular, the Union lost a huge amount of support in the wake of public debate on the radical right-wing tax plans proposed by Paul Kirchhof, who was brought by Merkel onto her campaign team as her expert on financial policy. At the same time, the SPD and the Greens began to talk “left.” While they had originally presented themselves as hard-line “reformers,” towards the end of the election campaign they shifted their tactics and posed as defenders of the welfare state.

An additional factor was the hurricane disaster in New Orleans. The complete failure of the Bush administration in the face of a natural catastrophe which had long been forecast, and the way in which hundred of thousands of poor people were left to their fate, made clear to many voters the consequences of policies that subordinate all social needs to the market and corporate profit-making.

It would, however, be entirely mistaken to think that the government which eventually emerges from these elections will respond to the concerns and needs of the voters. On the contrary, it will move even further to the right.

Discussion had already begun on the evening of the election on the mechanism for arriving at a stable government which will be able to continue the dismantling of the German social welfare system. This was the basis for the assertion by Schröder that he should remain chancellor.

“Nobody apart from me is able to construct a stable government,” he declared in a television debate on the evening of the election. The issue was, he said, “to ensure that reform processes start to move in Germany without endangering social harmony.“ In other words, Schröder is claiming that only he can implement further “reforms” without unleashing open social conflict.

He excluded any form of cooperation with the Left Party, which could theoretically assist the SPD and Greens in establishing a majority. A so-called “traffic light” coalition comprising the SPD, the Greens and the FDP, which would also have a majority, has been categorically rejected by the FDP chairman, Guido Westerwelle.

The only remaining alternative is a grand coalition under Schröder’s leadership. Angela Merkel angrily rejected such a demand, and persisted in stressing that as the largest parliamentary grouping, the Union had the right to determine the chancellor of a grand coalition. At the same time, prominent representatives of big business are insisting that a government has to be assembled as rapidly as possible.

The spokesman for the Retail Trade Federation, Hubertus Pellengahr, demanded that the parties unite to find a solution and form an effective government as quickly as possible. “Anything else promises uncertainty, and uncertainty is always the worst condition for an economic upswing.”

BDI President Jürgen Thumann said of the election result: “From the standpoint of industry and business, we are bitterly disappointed.” He warned that Germany would be more difficult to govern. He appealed to the Union and SPD to be conscious of their “great responsibility” and do everything necessary to get reforms moving.

A further possible coalition that is being discussed is an alliance of the Union, the FDP and the Greens. Prominent representatives of the Greens have declared that such a coalition is hardly realistic, but have also refrained from entirely excluding it. For its part, the Left Party has declared that it does not intend to disturb the plans of the other parties. It has no intention of mobilizing its voters and opposing the formation of either a grand coalition or another form of right-wing alliance.

Oskar Lafontaine, former SPD chairman and a leading candidate of the Left Party, had already on several occasions during the campaign endorsed a grand coalition. Following the vote, PDS Chairman Lothar Bisky echoed Lafontaine’s words in a televised debate. The Left Party would emerge as the victor from a grand coalition, he said, and called such an outcome a “lesser evil” to a Union-FPD government.