Sunday was the big day. Although the conservative CDU lost a lot of seats, they retained enough to stay in power. Merkel will definitely remain chancellor. The SPD had its worst election since 1960, garnering 11% less than the last election 4 years ago. The big winner is the FDP, the Free Democrats (kind of like libertarians), who increased their percentage by about 5%. The CDU and FDP together have an easy majority (Schwarz-Gelb, or black-yellow, is what their coalition is called, named after the colors of the respective parties). Guido Westerwelle, their most well-known candidate and an open gay, will probably be foreign minister. The 4th strongest party is now Die Linke, a party of socialists and former east German communists. Although the Greens are only the 5th strongest, they had a very successful election, crossing the 10% threshold for the first time in their history.
The election was not a very exciting one: many Germans felt that the debate lacked substance. Consequently, many abandoned the two big parties (CDU and SPD) and opted for the smaller parties; and voter turnout was lower than normal, only about 70%, about 7% lower than 2005. There were really only two possible outcomes: a black-yellow coalition, or a continuation of the coalition between the CDU and SPD. Neither option is that exciting for those of us on the left, but having the SPD in power is admittedly better than having the FDP. The CDU and FDP both want to extend the life of Germany's nuclear power plants.
However, some people seem happy that the SPD was ousted, because it will force them to change their party internally and hopefully push them back towards the left.