Schroeder's Social Democrats Party wins second term

BERLIN -- Chancellor Gerhard Schroeder's Social Democrats won Germany's closest postwar election Sunday, after a campaign that focused on fears of a war with Iraq and unleashed anti-American rhetoric.

A jubilant Schroeder appeared arm-in-arm with Foreign Minister Joschka Fischer of the Greens party, the partner in his governing coalition, before cheering supporters at Social Democratic Party headquarters.

"We have hard times in front of us and we're going to make it together," Schroeder shouted above the din.

Complete official results showed the Social Democrats and Greens combined won 47.1 percent of the vote to continue their coalition for another four years. Conservatives led by Bavarian governor Edmund Stoiber and the pro-business Free Democrats had a total of 45.9 percent.

The Social Democrats and environmentalist Greens won 306 seats in the new 603-seat parliament, compared to 295 for the two main opposition parties. Reformed communists won the other two seats. The results won't be final until they are certified Oct. 9.

Schroeder's coalition has a nine-seat majority in the new parliament, down from a 21-vote advantage in his first term. The margin is also tighter than in 1976, when a Social Democrat-led government won a 10-seat majority.

Stoiber had stopped short of conceding in a speech to rowdy supporters in Munich, but predicted that Schroeder's majority would be too slim to form a lasting coalition.

"Should the result not allow us to form a government, then I predict before you that this Schroeder government will rule for only a very short time," Stoiber said.

Stoiber said Schroeder will have to repair relations with Washington, damaged by a new German assertiveness that emerged over American determination to oust Saddam Hussein.

Schroeder, whose outspoken defiance against war with Iraq was credited with giving him a late-push in the tight campaign, said he won't back down. He has insisted he would not commit troops for a war even if the United Nations backs military action.

"I have formulated a German position, and I have nothing to retract on that count," Schroeder said in a panel discussion as election results were being tallied.

While Schroeder's anti-war stand resonated with German voters, the rhetoric reached a damaging peak in the final days of his campaign when Justice Minister Herta Daeuberl-Gmelin was reported to have compared President Bush to Hitler for threatening war to distract from domestic problems. She denied saying it.

The Social Democrats already have made clear she would not have a post if they are re-elected, however Schroeder sought to appease Washington with a conciliatory letter to Bush. Washington reacted coolly -- indicating to analysts that a Schroeder team will have to work hard to repair the traditionally strong bond.

"It seems to me that for the relationship and the Iraq issue itself there's no doubt that Schroeder was trying to tap radical pacifist and anti-American sentiment in the population and preliminarily it doesn't seem to have hurt him. And it may have even helped him," said Jeffrey Gedmin, director of the Aspen Institute think tank in Berlin.

Speaking on CNN Sunday, Sen. Joe Biden, chairman of the Senate Foreign Relations Committee, said the "core relationship between the Republic of Germany and the United States is solid. What you had is Schroeder doing what a lot of politicians do, trying to get out his base."

Biden, D-Del., said the relationship between the two countries can be repaired.

Stoiber, who used the ruckus over Iraq as ammunition, again accused the chancellor of whipping up emotions against the United States for electoral gain.

Stoiber, like the chancellor, opposes unilateral U.S. action, but he insists Germany must be ready to support any U.N.-backed action against Saddam -- though not with front-line troops.

Stoiber's platform boosted the conservatives -- the Christian Democrats in alliance with the Bavaria-only Christian Social Union -- to 38.5 percent, up from 35.1 percent four years ago. The results indicate they have put behind them a campaign financing scandal that had engulfed the Christian Democrats and their former leader, Helmut Kohl.

Still, Schroeder's failure to deliver on economic promises, including reducing unemployment stuck around 10 percent, eroded support for the Social Democrats, which slid 2.4 percent from 1998's 40.9 percent result.

The Greens were elated by their strongest showing in their 22-year history -- 8.6 percent. Leader Rezzo Schlauch said his party got momentum from the Iraq debate and the popularity of Fischer.

"We are so happy ... There was the issue of war and peace, and we have a highly competent foreign minister. It was a combination of the issues and the people in charge," Schlauch said.

Some 80 percent of Germany's 61 million voters turned out Sunday -- casting two votes, one for a local candidate and one for a party. The party vote is critical because it determines the percentage of seats each party wins in the Bundestag, or parliament, chosen from a list of candidates it has submitted.

Parliament is being downsized to a minimum 598 seats, however the complex voting system allows for seats to be added if a party wins more direct seats in a state than it is entitled under the distribution of seats based on the second vote.

The ex-communist Party of Democratic Socialism fell short of the 5 percent necessary to form a parliamentary group, however two candidates won seats.

Beyond his forthright stand on Iraq, Schroeder broad-brushed much of his agenda for a second four-year term except to uphold the Social Democratic values like a fair society and the welfare state.

Stung by Germany's jobless problem, he has pledged to reform the highly regulated labor market. He has also promised to expand all-day schools and child care to make life easier for working mothers.

Also clear is what policy reversals threatened by Stoiber won't happen: An immigration law that Stoiber blasted as too liberal now is likely to survive, along with a further increase in a fuel tax on Jan. 1 that the conservative wanted to stop. A law to phase out nuclear power is also expected to stand under a new Schroeder government.