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Schroeder outlines battles ahead
BERLIN, Germany -- Germany's narrowly re-elected Chancellor Gerhard Schroeder has moved to quell his critics' claims that the country faces a crisis because of the size of his mandate. Schroeder's centre-left Social Democrats and the Greens got a majority of just nine in Sunday's poll over the combined opposition parties, down from 21 at the last election. The full result will not be final until they are certified on October 9. (Analysis) Schroeder said after declaring victory: "We have hard times in front of us and we're going to make it together." The markets reacted on Monday with a price fall as analysts said the new government was too weak to reform the world's third largest economy, which many economists say is highly taxed, over-regulated and risks becoming as stagnant as Japan's. But Schroeder, who said he would start coalition talks with the resurgent Greens, said: "Those who think that there will be large difficulties are wrong." Edmund Stoiber, Schroeder's conservative rival and Christian Democrat leader, predicted the chancellor's new mandate would not last a year. He said: "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."
He added: "With this Red-Green coalition Germany won't return to economic health and it won't break out of the isolation from Europe and America that Schroeder drove it into." CNN's European political editor Robin Oakley, in Berlin, said: "Now (Schroeder's) problems begin. "People were looking for a really decisive result in this election, which gave a strong government the chance perhaps to tackle some of the rigidities in the labour market." One of Schroeder's first tasks is to repair relations with the United States, damaged by his strict opposition to a U.S.-led war on Iraq and by reports that Justice Minister Herta Daeubler-Gmelin made comments -- which she denied -- comparing President George W. Bush's methods to Hitler's. Bush's spokesman called the reported comments "outrageous," while national security adviser Condoleezza Rice said bilateral relations had been "poisoned." On Monday, Schroeder announced that Daeubler-Gmelin would step down as a result of the row. (Full story) Another post-poll casualty was Juergen Moellemann, deputy leader of the liberal Free Democrats, who resigned Monday over a row with a prominent German Jewish leader. Party leader Guido Westerwelle said the row had caused the FDP "massive damage." The day-after-the-night-before began with the German DAX share index briefly falling by as much as 1.4 percent. Markets had hoped for a conservative-liberal coalition, seen as more likely to cut taxes and implement business friendly policies. Online editions of the German daily newspaper were able to adjust to the changing fortunes of the parties. "Shaky victory for Red-Green," said Bild on its Web site. "Never before has a governing party suffered such losses after only four years. Gerhard Schroeder, the big winner in 1998, is now the big loser," Bild said. The top-selling paper also described Greens' Foreign Minister Joschka Fischer as Schroeder's "saviour." Schroeder will have to tackle problems such as chronic unemployment and slow economic growth and confront strains in the country's generous welfare state. He said he would swiftly begin negotiations with the Greens on a coalition pact laying out the government's agenda for the next four years, a task expected to take several weeks. "We'll get going immediately," he said Monday before his party's national executive met to discuss the election result. Social Democrat General Secretary Franz Muentefering told German radio on Monday: "In three weeks the government will be stable." French President Jacques Chirac was among the first international leaders to congratulate Schroeder on his re-election. (World reaction) "After your fine election victory, I wish to send you my warm congratulations and all my wishes for success in the high post with which you have, once again, been entrusted," Chirac said.
Speaking later on Monday, Stoiber claimed that, in real terms, his party and its ally had won. He said: "The CDU/CSU is the winner of the election because we gained three percent (of the vote) and the SPD lost votes, not just in terms of percentage points but they also lost in terms of the number of mandates. "We have gained a lot among workers, among officials, among small enterprises, among agriculture -- and that is the basis of a strategic success and we have to build on it." But in a sign that Stoiber, 60, will not get a second chance to rule Germany, Christian Democrat leader Angela Merkel, who stepped aside to let him fight Schroeder, took over the powerful position of conservative parliamentary leader. The move puts her in a strong position to become conservative champion at the next election.
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