John Fund:
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The muddled result, with neither major party able to form a stable parliamentary majority, means that Germany will not be taking decisive action anytime soon to reform its unwieldy welfare state, which has helped bring it 11% unemployment and zero economic growth That will not be good for the world. Germany, the third-largest economy in the world, represents 30% of the output of the European Union. The "sick man of Europe" is likely to remain bedridden for a while longerMost voters and nearly all of the business community wanted a decisive result. Instead the peculiarities of Germany's parliamentary system delivered a complete mess with the most likely government an unwieldy "grand coalition" of the conservative Christian Democrats and the left-wing Social Democrats. Yoking two such bitter rivals together will likely lead to gridlock, confrontation and ultimately new elections within two years. "If you mix cold water and hot water you get lukewarm water no one really likes," says Wilfried Prewo, the head of the chamber of commerce in Hannover.
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German voters may not again get quite as good a shot at installing a government that can bring about real economic reforms. Voters balked at real change at the last minute. In the words of economist Norbert Walter, "they wanted someone to wash their fur, but at the same time not get it wet." Most Germans understand that their country has to modernize in the long run, but, says Thomas Kielinger, a writer for the newspaper Die Welt, "when push comes to shove many are reluctant to go for the candidate who tells it like it is."
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