LONDON -- "It's a distressing outcome, the worst possible."In the confusion from Germany's closest parliamentary election in history, Chancellor Gerhard Schroeder claimed victory again yesterday over his opponent, Angela Merkel - who again claimed victory herself.
Whatever the ultimate outcome, one thing seems clear: With leadership changes imminent in Europe's most powerful countries - in France, Britain and possibly Italy - Germany's chance to reform itself and rebound to play a stronger role in Europe has been lost for now.
The importance of Sunday's vote goes beyond Germany's borders, as reflected already by the wobbling euro, which yesterday hit a seven-week low against the dollar, a drop that has serious implications for countries throughout Europe.
Whatever government emerges in Berlin, analysts say, it will be a patchwork coalition of parties too weak to push through reforms addressing fundamental problems: no economic growth, high deficits and unemployment that exceeds 11 percent.
"It's a distressing outcome, the worst possible," said Christoph Bertram, director of the German Institute for International Politics and Security in Berlin. "At a time when we're desperate for leadership in Germany and when there is no legitimate leadership in Europe, Germany, which should have played that role, is out of the running."
In Germany's system of government, the 598 members of the lower house of parliament, the Bundestag, elect the chancellor.
That happens, almost always, by the party that wins the most seats joining forces with one of the smaller parties to create a majority and thus form a ruling coalition.
Until Sunday's vote, election results have always allowed one of the major parties to reach a majority in the parliament by joining forces with a party whose political philosophy at least resembled its own. The Social Democrats, while led by Schroeder, have governed in partnership with the Greens; the Christian Democrats, now led by Merkel, in the past have reached a majority by relying on the Free Democrats.
Or the Social Democrats and the Christian Democrats governed together - an outcome difficult to arrange in this case because Schroeder and Merkel each claims to have won the right to be chancellor.
Sunday's results gave Merkel's center-right Christian Democrats 35.2 percent of the vote; Schroeder's Social Democrats 34.3 percent; the Greens, who had been the junior partner in government, had 8.1 percent, and the recently formed extreme Left Party won 8.7 percent.
All of those numbers add up to one thing: Every combination of parties that could possibly be created to reach a majority will create a government of opposing political philosophies.
"Those who wanted a change in the chancellery have failed grandiosely," Schroeder said to a cheering throng Sunday night while Merkel told a mostly downcast group of supporters that they had managed to unseat the ruling coalition.
"In this case, there is a mathematical winner but it is impossible not to recognize there is an emotional winner," said Ulrike Guerot, senior transatlantic fellow at the German Marshall Fund in Berlin. "Schroeder was so far down and Merkel was so far up, that a lot of Germans see the results as a victory for him and a defeat for her."
Without doubt, Schroeder gained momentum in the last days before the vote. He rebounded from 20 points down, according to some polls, and his turnaround was displayed as much by the reaction of the candidates Sunday night as by the numbers.
As each party leader addressed supporters Sunday, Schroeder bounced energetically onto a stage, fists raised, cheered as if a rock star. Merkel, on the other hand, shuffled before her supporters as if she was looking for a lost dog and spoke as if in church - and her congregation was respectfully quiet.
Yesterday, all parties were in negotiations with all other parties. Most analysts predict - without much confidence - that the two major parties will form a coalition, with or without Schroeder.
That would leave Schroeder's Social Democrats and its go-it-slow approach to reform - including modest tax cuts and modest reductions in benefits that the party argues are already in place - ruling with Merkel's Christian Democrats, who favors pro-business, free-market reforms and steep reductions in social welfare.
"Whatever coalition is formed will mean compromise like never before," said Guerot, of the German Marshall Fund.
The politics of assembling a coalition could mean policy changes for either a Schroeder-led or a Merkel-led government. Merkel, for example, might lure the Greens as a partner by agreeing to close nuclear power plants, which the outgoing government had planned.
Aside from Germany's internal problems, the election came at an especially bad time because of pending changes to the countries that historically have had the most to say about the direction of Europe.