Most Germans are unhappy with the indecisive outcome of the federal elections which left such a small gap between the two major parties, yet most would vote the same way again. Faced with this political reality Angela Merkel and Gerhard Schröder have little option but to pursue their talks today on a potential grand coalition between them.
Initial contacts have established that alternative coalitions involving the Greens, the liberals or the left are ruled out by ideological incompatibility. It remains to be seen whether the CDU-CSU and the SPD can agree a programme of government and who should lead it before the Bundestag meets next month.
The clash of personalities involved was dramatised during the remarkable election campaign in which Mr Schröder closed the large gap between the two leaders and parties. Despite winning by one percentage point and three seats, Dr Merkel is widely perceived to be the loser and Mr Schröder the winner. As a result all eyes are on which leader will emerge ahead in the talks. Will Dr Merkel keep the confidence of her party after such a badly judged campaign? Can the SPD afford to dispose of Mr Schröder after such a brilliant performance? Both leaders could be sacrificed in pursuit of an agreement. Or could there be a pact to rotate the chancellorship?
As to policy, there may be less division between them than many assume. Dr Merkel's programme concentrates on taxation and labour market reforms to stimulate growth and employment, while Mr Schröder demanded time for the changes he made last year to take effect in order to achieve similar goals. The main difference between them concerned how to combine greater economic effectiveness with continuing social protection.
The balance of probability remains that Germany will have a grand coalition next month. This would reflect the consensual and centrist cast of German politics and society. It would match the considerable cross-party agreement that firm measures are needed to tackle long-standing structural economic problems, without abandoning the basic compromise between capital and labour on which Germany's post-war prosperity has depended. The great drawback of such an arrangement is that its elephantine stability would provoke and encourage radical or extreme movements on the right and left.
That means such a coalition would probably be limited to one parliamentary term and strictly defined as to policy. But it could work and should not be underestimated by Germany's EU partners. This outcome changes expectations that a clear-cut Merkel victory would open the way for similar change in France and would allow the EU's Lisbon process to take a parallel path. A more cautious, incremental and balanced outcome is now likely in Germany and elsewhere in Europe. This should stimulate much greater cross-fertilisation of ideas on how best to combine economic efficiency and solidarity. Next month's European Council meeting under the UK presidency can give this debate an EU-wide platform.