It’s now official, Angela Merkel will become Germany’s next chancellor and Gerhard Schroeder will disappear from the scene although it is not entirely clear what his plans are. There was a lot of confusion over the three week-period that has elapsed since the election and we may never know to what lengths Schroeder went to retain his position, but we do know that whatever the price Merkel paid for her new role, it was significant:

In return for allowing Ms Merkel to become chancellor, the SPD is expected to get more policy portfolios than the CDU, including weighty ones such as foreign affairs, finance and the ministry in charge of labour-market reform. The CDU will get the defence and interior portfolios.

And that is just the start. More negotiations will follow, the actual agenda of the new coalition will need to be hammered out and the remaining cabinet portfolios need to be divided between the two parties. This is coalition-building European style and while I refuse to reject this as impractical, unworkable or undemocratic, given the players involved this time, it is a potential recipe for failure.

Both parties are ideologically too divergent to find common ground on some of the most pressing issues - mostly economic - that Germany faces, and the fact that social-democrats have taken some of the key ministries may be a blessing is disguise for Merkel who could potentially dissociate herself from any policy failures. On the other hand the coalition will have the Merkel-brand name on it so it may well be to her long term advantage to make things work which will not be easy as she is a chancellor-by-default, lacking a clear electoral mandate.

In turn, the social-democrats can not be seen to sign up for drastic reform as it will hurt their chances in a next election, so Merkel has to carefully balance the need for reform, her future chances in another election as well as keep rivals in her own conservative camp at bay. A tough balancing act whichever way you look at it.