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What next for triumphant Merkel?

Monday, September 23, 2013 - 02:30

Sept 23 - German Chancellor Angela Merkel faces the daunting prospect of persuading her centre-left rivals to keep her in power after her conservatives notched up their best election result in more than two decades but fell short of an absolute majority. Joanna Partridge reports from Berlin on the challenges she faces and what the result means for the rest of Europe.

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She has a mandate from voters, but she still has to form a government. Falling just short of an absolute majority, German Chancellor Angela Merkel has the tough task of building a coalition, maybe with the opposition SPD. SOUNDBITE: German Chancellor Angela Merkel, saying (German): "Of course we're open for talks and I've already had initial contact with the SPD chairman." Merkel was the big winner of the first German vote since the euro zone crisis erupted. But her third term won't be a walk in the park, abroad or at home. German industry has already called for an overhaul of the government's renewable energy policy, and wants the costly subsidy system scrapped. Alexander Schumann is from the German Chambers of Commerce and Industry. SOUNDBITE: Alexander Schumann, Chief Economist, German Chambers of Commerce and Industry, saying (English): "Energy cost is the main topic the next government has to tackle. We had a continuous rise in energy prices due to the energy policy u-turn we made after Fukushima. This has to be changed because we have to shift the current system of the turbine prices to a more market-orientated approach." Despite concerns, business sentiment seems to be looking up. A survey showed German firms expanded more quickly than last month. Times have changed since the KPM porcelain manufacturer was founded - it was once owned by the German monarchy. It now has 180 employees and had sales of 10 million euros last year. Executive Vice President Maurice von Dalwigk. SOUNDBITE: Maurice von Dalwigk, Executive Vice President, KPM, saying (English): "We do produce good quality, we have very good design, actual design, so for us it's a very comfortable situation at the moment." PTC KPM has been producing porcelain in Berlin for 250 years and all its products are still made in the city. But now it's not just for German customers, but also for export markets like the USA and Japan. Many German firms are dependent on exports. Europe's a big trading partner, and Merkel will need to keep her eye on the euro zone. Marcel Fratzscher, President of economic think tank DIW Berlin, says some decisions have been delayed. SOUNDBITE: Marcel Fratzscher, President of economic research institute DIW Berlin, saying (English): "There are tough reforms ahead of us on banking union. The German government needs to decide what it wants and how it wants it to be done. There is a question on the programmes to the programme countries, to Ireland, Portugal and Greece." It's a challenging to do list - but first Merkel must tackle the small matter of building a coalition.

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What next for triumphant Merkel?

Monday, September 23, 2013 - 02:30