From:
http://medienkritik.typepad.com/blog/
+++UPDATE+++: Because of the relatively close CDU-CSU results relative to the SPD, both Schroeder and Merkel are laying claim to the Chancellery. It still looks like the CDU-CSU has the better position, but anything is possible, with Schroeder pointing to the fact that he is far more popular than Merkel in a one-on-one comparison. It may be that the distribution of seats is a virtual tie between the CDU-CSU and SPD because of the direct election of candidates. In the case that the SPD ties or pulls slightly ahead in terms of overall seats, Schroeder may still be able to remain Chancellor.
(PRIOR TO UPDATE)-
Strongly looks like a "Grand Coalition" between CDU-CSU and SPD with Merkel at its head. (Update: Merkel as Chancellor is far from certain, the SPD may receive as many seats as the CDU-CSU because of direct election results, and Schroeder still has a clear chance.) The CDU-CSU appears to be far below the pre-election poll numbers, which had the party around 41%. One of the biggest losers in this election will be the pollsters as they clearly and dramatically failed to accurately predict the correct outcome.
Analysis: There remains a high degree of uncertainty at this point. Merkel may still be Chancellor, Schroeder may still be out, but the CDU-CSU's poorer than expected performance will almost certainly guarantee a gridlock prone "Grand Coalition" with a heavier SPD proportion than expected.
It looks like Angela Merkel completely failed to energize her base. The SPD did a much better job of campaigning with a sympathetic media at its side and turned in the expected performance despite Germany's massive domestic problems. Schroeder's strong debate performance further boosted the SPD and took the air out of Merkel. Many conservative voters appear to have voted FDP rather than CDU-CSU. This result is going to badly weaken Merkel in the Chancellery (if she makes it).
There also remains an outside chance of a three-way coalition between either SPD/Greens/LeftPDS or SPD/Greens/FDP or even CDU-CSU/FDP/Greens. Many prominent politicians categorically ruled-out these constellations before the election, but you just never know in politics...power can be tempting.
As we see it, things don't look particularly good for Germany or German-American relations. The key word at this point is: Gridlock. Expect to see a lot of it in Germany's future.
(source)
Notes for readers not familiar with German politics: SPD = Schroeder's Social-Democrats; CDU-CSU = Merkel's Christian Democratic Union and Bavarian Christian Social Democratic Union; Grüne = Greens; FDP = Free-Democrats (business and economically-minded party), Linke.PDS = Left-Wing ex-Communist party; Sonstige = Others.
Check out Davids pre-election analysis of the situation if you are unfamiliar with German politics and want to learn more.
This is the worst possible outcome for Germany. Those SPD voters who are comfortable with the current stagnation have pulled off a deadlock with the Union voters who realize the necessity for change. Another complicating factor is that the upper house of parliament, the Bundesrat, remains in the hands of the conservative Union. A continuing Schroeder chancellorship would face that obstacle at every turn. The charmless Merkel confronts the smiling confidence man (Hochstapler) Schroeder and Germany is the loser.
This is the worst possible outcome for Germany. Those SPD voters who are comfortable with the current stagnation have pulled off a deadlock with the Union voters who realize the necessity for change. Another complicating factor is that the upper house of parliament, the Bundesrat, remains in the hands of the conservative Union. A continuing Schroeder chancellorship would face that obstacle at every turn. The charmless Merkel confronts the smiling confidence man (Hochstapler) Schroeder and Germany is the loser.