Germany's Angela Merkel faces tough coalition talks

Chancellor Angela Merkel's triumphant conservative party is considering who to team up with to form a new German coalition after their election victory.

Her conservative bloc got 41.5% - their best result since 1994, but just short of a clear majority.

The election was a shock for their liberal partners, the Free Democrats (FDP), who failed to get any seats.

A coalition with the centre-left Social Democrats (SPD) is seen as most likely - but only after hard bargaining.

Mrs Merkel told a news conference on Monday that she had already contacted the SPD chairman, Sigmar Gabriel.

"We are, of course, open for talks", she said, adding that Mr Gabriel had told her the SPD must first hold a meeting of its leaders on Friday.

Germany 'a model'

The SPD came second, with just under 25.7%. In 2005-2009 they were in a "grand" coalition with Chancellor Merkel's Christian Democrats (CDU) and their Bavarian allies, the CSU - but correspondents say that the experience has made them wary about working with the CDU/CSU again.

The SPD suffered a big drop in its electoral support in 2009. That result was widely seen as punishment for having teamed up with Mrs Merkel and been made to look very much the junior partner.

At the news conference Mrs Merkel also said that "our European policy course will not change".

She said Germany's labour market reforms in the past decade were a model for other European countries.

Her convincing election victory is seen as proof that many Germans like her insistence on austerity and budget discipline for heavily indebted countries such as Greece.

She expressed regret that the FDP had failed to make it into parliament - the first time it has suffered such a blow in Germany's post-war history.

FDP chairman Philipp Roesler has tendered his resignation and party secretary general Christian Lindner is tipped to succeed him, German media report.

Weeks of coalition negotiations are expected, but the BBC's Katya Adler in Berlin says the SPD will not want to be accused of deliberate delaying tactics or causing a vacuum of power.

Hard bargaining

The SPD has criticised Mrs Merkel's economic austerity drive, saying Germany should show more solidarity with struggling EU partners in southern Europe.

The SPD leader, Peer Steinbrueck, was finance minister in the previous grand coalition, but has said he would not serve in such a government again.

There is speculation that the CDU might yet form a coalition with the Green Party, though that is seen as less likely than a CDU-SPD government, because of bigger policy differences.

The liberal FDP was beaten by the Green Party (8.4%) and the former communist Left Party (8.6%). It almost finished behind the new Alternative fuer Deutschland (AfD), which advocates withdrawal from the euro currency and took 4.7%, just short of the parliamentary threshold.

In theory the three leftist parties - the SPD, Greens and Left - would have enough seats together for a majority. However both the former two have ruled out an alliance with the Left Party (Die Linke), regarding it as too radical.

'Something fantastic'

On Sunday night Mrs Merkel addressed jubilant supporters at CDU headquarters. After waiting for chants of "Angie, Angie" to die down, she told them: "This is a super result."

"We can celebrate tonight because we have done something fantastic."

Correspondents say the result is a ringing endorsement of her steady leadership during the eurozone crisis.

Mr Steinbrueck conceded that it would be up to Mrs Merkel to decide how to proceed, saying: "The ball is in Mrs Merkel's court. She has to get herself a majority."

Since 1945 only two German chancellors before Angela Merkel have won a third term

CDU supporters celebrated what appeared to be a strong victory

SPD leader Peer Steinbrueck does not want to serve in a Merkel coalition again

FDP chairman Philipp Roesler oversaw a disastrous result for the party