Confusion, uncertainty and potential instability are the most immediate victors in yesterday's Germany's general election, which has given neither of the major political blocs a mandate to form a government.
In a fascinating campaign, Angela Merkel's centre right coalition saw its poll lead shrink from 20 points to a bare one per cent over combined support for the Social Democrats, Greens and the new Left party. Germany's political system has fragmented, with some 30 per cent of votes going to minor and small parties.
The result is a personal disaster for Mrs Merkel and a triumph for Chancellor Gerhard Schröder. She ran a lacklustre campaign based on a clearly identified call for economic reforms that would make Germany a better place to do business in. He defended existing social protection and his economic reform programme. His gamble in calling the election one year early has paid off. Not only has he closed the national gap between the two blocs, but he has won a majority in most of the länder. In Germany's system of co-operative federalism, where political power is shared between Berlin and state capitals, this will make a real difference.
A grand coalition is therefore the most likely outcome - and the apparently preferred choice of Germany's 62 million voters in a high turnout. This could take months to negotiate into being - not least because Dresden will not vote for another two weeks. The alternative bloc coalition options on offer are probably ruled out, since neither the christian democrat-liberal alliance has an arithmetical majority and nor does an SPD-Green alliance. Hybrid combinations adding the Greens to Mrs Merkel or the Left party to Mr Schröder are not politically feasible. This impasse could create political instability, leading to fresh elections.
Germany's electoral mood is for a compromise between the alternative programmes of economic reform offered to tackle its recent vicious economic circle. Ten per cent unemployment, relatively high savings, low consumer spending and consequentially low economic growth reinforce each other. Nevertheless, exports are buoyant and levels of productivity and innovation high. Thus an election dominated by polarised models of economic performance may not have properly reflected political preferences or economic realities. This would be the rational basis for a grand coalition capable of negotiating big bargains between capital and labour.
The outcome will have significant implications for other Europeans and the wider world. Germany's model of economic and political power-sharing inevitably affects the European Union's bargaining on these subjects as well as its economic and political well-being. This result adds to the confusion generated by French and Dutch referendums on the proposed EU constitutional treaty during the summer. More debate is needed about the alternative models of socio-economic order on offer to voters.