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Here's the latest report from AP (via Yahoo), in gutes Englisch:

German Elections Too Close to Call
Sun Sep 22, 1:15 PM ET

By TONY CZUCZKA, Associated Press Writer

BERLIN (AP) - Chancellor Gerhard Schroeder and his conservative challenger Edmund Stoiber ran neck-and-neck Sunday in one of the nation's closest postwar elections. The vote was roiled by tension with the United States over Iraq that peaked after Schroeder's justice minister indirectly compared President Bush ( news - web sites) and Adolf Hitler.

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Early returns by three polling agencies differed on which of the two main parties, Schroeder's Social Democrats and two Christian Democratic parties led by Stoiber, was leading. However, the Greens' strong showing in all polls would give an advantage to another term for Schroeder's coalition with the small environmentally oriented party.

Early returns by the Forschungsgruppe Wahlen for ZDF public television and Forsa for private television showed the Social Democrats and Christian Democrats about even at 38 percent.

However, infratest-dimap showed Stoiber's team with 39 percent to Schroeder's 37 percent. The results fell within the margin of error.

The Greens party, in coalition with the Social Democrats for the last four years, was polling at about 9 percent — which could be decisive in helping Schroeder stay in power.

According to ZDF, the Social Democrats and Greens would win 300 seats to 296 for the Christian Democrats with their likely coalition partner, the liberal Free Democrats. Another TV station, ARD, put the seat distribution at 300 for Schroeder's coalition and 298 for Stoiber's.

Early returns showed the small business-friendly FDP polling around 7 percent.

They also indicated the ex-communist Party of Democratic Socialism failed to achieve the 5 percent of the vote necessary to enter parliament, however they still could make it into parliament if candidates win three seats directly.

Cheers burst from the crowd at CDU headquarters as exit polls were announced, followed by groans that the party's preferred coalition partner, the FDP, was behind the Greens.

"We have achieved our most important aim of becoming the strongest party in parliament," said Christian Democrat leader Roland Koch.

Rezzo Schlauch, the Greens leader in parliament, said the party got momentum from the Iraq debate and the popularity of Foreign Minister Joschka Fischer. "We are so happy ... There was the issue of war and peace, and we have a highly competent foreign minister. It was a combination of the issues and the people in charge."

The final days of the hotly contested race were overshadowed by tensions with the United States over Iraq, in particular by Justice Minister Herta Daeubler-Gmelin's reported statement comparing Bush to Hitler for threatening war to distract from domestic problems.

While Schroeder has resisted calls to force her resignation, a government official said Schroeder would not include the minister in his Cabinet if he wins re-election. The official spoke on condition of anonymity.

In a campaign already remarkable for straining relations with the United States because of Schroeder's emphatic opposition to American military action to oust Saddam Hussein ( news - web sites), Washington responded with anger to the remarks attributed to the justice minister.

The minister has denied drawing a direct comparison between Bush and Hitler. In a confused explanation, she initially said she had compared their methods, and later told reporters she had referred to diversionary tactics during a chaotic discussion, saying, "We know that from our history, since Adolf Nazi."

Despite sharp reaction from the White House and attacks by conservative challenger Stoiber for undermining U.S.-German relations, Schroeder's anti-war stance resonated with Germans who overwhelmingly oppose a new Mideast conflict.

Schroeder's unusually harsh rhetoric — along with his handling of Germany's catastrophic floods and strong performance in a televised debate — helped him close the gap with the Bavarian governor, who led the polls for months with attacks on Schroeder's economic record.

Voter turnout was running slightly behind 1998, with official figures showing 42.8 percent of the more than 61 million voters casting ballots by 2 p.m., compared to 47 percent at the same hour four years ago.

Though the ruckus over the justice minister ruined the final hours of his campaign, Schroeder appeared confident and smiling as he voted in his home city of Hanover. He declined to answer questions about the minister's fate, but admitted: "One is always a little nervous."

His conservative challenger has used the affair as ammunition, accusing the chancellor of whipping up emotions against the United States, Germany's staunchest ally, for electoral gain. Stoiber has pledged to repair the damage with Washington if elected.

Shortly after casting his vote with his wife, Karin, in their hometown of Wolfratshausen, about 25 kilometers (15 miles) south of Munich, Stoiber refrained from new attacks before heading off to join the annual Oktoberfest celebrations.

"I am confident that we will win the election," Stoiber said, smartly dressed in a gray suit and red-striped tie, though not the traditional Bavarian lederhosen and short wool jacket he usually wears to vote. "We had a good campaign."

On Iraq, Schroeder has insisted he would not commit troops for a war even if the United Nations ( news - web sites) backs military action. Like the chancellor, Stoiber opposes unilateral U.S. action, but he insists Germany must be ready to support any U.N.-backed action against Saddam — though not with frontline troops.

Stoiber also wants faster tax cuts than Schroeder especially for small and midsize businesses. He pledges to overturn a Schroeder law that widened the powers of labor unions in workplace decisions and to curb rising energy taxes. And he intends to scrap an immigration law passed under Schroeder that he says is too liberal.

With two big and three smaller parties competing Sunday, the Free Democrats could resume the kingmaker's role they played in most postwar governments.

The major party best able to form a stable coalition — not necessarily the one with the most votes — will lead the next government and downsized 598-seat parliament.

Schroeder, 58, has governed with the Greens since unseating Helmut Kohl in 1998 and ending 16 years of conservative rule. He says he wants another four years with the party.

Stoiber, 60, has embraced the Free Democrats as he ran for national office after governing Bavaria for nine years. But the pro-business party FDP refused to rule out a coalition with either party in hopes of replacing the Greens as third-strongest force.

Also defending parliamentary seats are the former East German communists, who hope to make more inroads among leftist voters in richer west Germany who are disillusioned with the Social Democrats' shift toward the political center under Schroeder.

Germans cast two votes Sunday, one directly for a local candidate and one for a party. The party vote is critical because it determines the percentage of seats each party wins in the Bundestag, or parliament.

To enter parliament, parties must either win 5 percent of the vote or at least three seats directly.

In the current 669-seat legislature, Schroeder's Social Democrats hold 298 seats, the Christian Democrats/CSU 245, the Greens 47, the Free Democrats 43 and the ex-communists 36.

Recent evens in Germany prove two things that get said here a lot.

The first is that a highly regulated, highly taxed welfare state with much social insurance and many social welfare programs is a drag on the economy. When voters are discontented, though, they may well vote for more of the same, having grown used to state intervention and having come to rely on it. So one digs oneself deeper and deeper into a hole, until someone comes along to change things.

That seems to be a general trend or law, though one can't rely on it in every case. What makes Germany different from France or Sweden is the burden of East Germany. Other country's can postpone the reckoning. Germany inherited a dependent, unindustrious population in the East, so the drag is much heavier there than in other European countries.

The second thing is that the Gramscian, "long march through the institutions" of the 1960s New Left will have an effect. I'd have said that the former New Leftists were more likely to be influenced by the capitalist system than to influence conditions in a radical direction.

On the whole, that's probably true, but at key moments, the leftist antecedents of officials like Schroeder or Fischer will have an effect. And that time is now: see Germany's attitude towards Bush's Iraq war. A CDU leader might also be tempted to tweak America for political gain, but it would be understood to be part of the electoral game. With Schroeder and Fischer it's more serious than that.

Deutsche Welle is a good source for news from Germany in English (and other languages).