Triumphant Merkel reaches out to leftist rivals

German Chancellor Angela Merkel on Monday reached out to her centre-left rivals on potentially forming a coalition government after romping to victory in elections that banished her preferred allies. Voters cemented Merkel in the title 'the world's most powerful woman', handing her conservatives close to an absolute majority after a campaign focused on her image as a safe pair of hands through Europe's financial turmoil. With 41.5 percent, Merkel's Christian Democrats (CDU) notched up their best score since Germany's joyous reunification in 1990, prompting congratulatory messages from Western leaders and sending the euro higher against the dollar in Asian trade. In a phone call to Merkel, US President Barack Obama "noted his deep appreciation for Chancellor Merkel's friendship, leadership, and steadfast support of the transatlantic relationship," a White House statement said. The two leaders agreed to "continue their close cooperation on key issues of regional and global concern", it added. But after her Free Democratic Party (FDP) junior allies flunked out of parliament, Merkel faces a lengthy period of horse-trading with one of two leftist parties to partner up on steering Europe's top economy for another four years. "We are open for discussions," she said, after accepting a standing ovation from cheering supporters waving German flags at CDU party headquarters in Berlin. "I had a first contact with the SPD (Social Democrats) chairman who understandably asked that the SPD first hold its party meeting on Friday," she told reporters. Merkel, who already governed in a left-right "grand coalition" with the SPD during her first 2005-2009 term, also left the door open to a possible tie-up with the ecologist Green party. But analysts say neither centre-left party is keen to join a Merkel-led government, nor would they be easy bedfellows for the chancellor. The Social Democrats, who scored less than 26 percent, are haunted by their experience in the last grand coalition when Merkel seemed to swipe credit for all the government's achievements and the SPD was punished by voters with its worst-ever result. "The SPD would perhaps be more comfortable in opposition and is therefore negotiating from a position of relative strength," the European Council on Foreign Relations said in a statement. "Merkel needs SPD support more than the SPD needs her." SPD leader Sigmar Gabriel was coy about possible advances from Merkel. "Mrs Merkel must say where she wants to go with Germany, what her goals are, what she is ready to agree," he told reporters. Her SPD election rival Peer Steinbrueck campaigned for more social justice, especially an across-the-board minimum wage compared to Merkel's stance for more flexible wage agreements, regionally and by sector. For the SPD, there is nothing automatic about a grand coalition, SPD general secretary Andrea Nahles said, adding there were "no pre-requisites or otherwise in the direction of a grand coalition". Media commentators agreed that the Social Democrats were Merkel's most realistic powersharing option but would not make things easy. "The stronger but also more dangerous partner would be the Social Democrats," news website Die Zeit Online said. "You can assume that this time they (the Social Democrats) won't simply allow themselves to be made to look small any longer by Merkel." Meanwhile the Sueddeutsche Zeitung daily said "the biggest hurdle" to a tie-up with the Greens had been removed after Merkel abruptly decided to exit nuclear power after the 2011 Fukushima disaster in Japan. Nevertheless negotiations would be "tough". "The reservations are great, the climate in part embittered," the Munich-based centre-left newspaper said. After the party's support crumbled to 8.4 percent, the Greens' entire leadership announced Monday they would step down, paving the way for new elections to the board in October. Volker Kauder, head of Merkel's conservative parliamentary group, conceded on ARD public television that a coalition with the Greens would be "certainly very hard". Either way, based on past experience when coalition negotiations have taken on average around a month, observers foresee weeks of wheeling and dealing ahead. "It will need a bit of time," Merkel said Monday. Political scientist Nils Diederich said many Germans backed a grand coalition. "German voters are not looking for controversy, they want peace and quiet. And therefore a grand coalition would be best," he said. After the FDP's worst-ever election defeat, its leader Philipp Roesler, who was Merkel's economy minister, resigned as leader of the pro-business party whose other cabinet members included Foreign Minister Guido Westerwelle.