http://www.iht.com/articles/2005/09/21/news/germany.php

Schröder party hints at Free Democrat alliance  By Judy Dempsey International Herald Tribune

(...)Franz Müntefering, one of Schröder's most adept party organizers, was giving nothing away Wednesday about Schröder's future except to say that he wanted to remain chancellor. After holding talks with the Greens, Müntefering said, "We spoke about the possibility of such a coalition with the Free Democrats. We all know that we need a third party to form a stable government."

The Free Democrats won 9.8 percent of Sunday's vote and have 61 seats in the Bundestag, or Parliament. If the party were to join such a Schröder-led center-left coalition, the resulting grouping of 334 seats would have a comfortable working majority in the 613-member Bundestag.(...)

But there were big differences between the Free Democrats and Greens over several issues, particularly environmental and tax policy.

Yet inside the Free Democrat party of professionals, entrepreneurs and managers of privately owned businesses, there are already rumblings taking place over strategy, whether the party should be more flexible in choosing its coalition partners and personnel questions.(...)

If the Greens opt for going into opposition, then Merkel's chances for becoming chancellor would all but disappear. "Her only chance is with a traffic-light coalition," a senior Christian Democrat said.(...)

"The point is that Schröder and his Social Democrats will not join a grand coalition under Merkel," the official said. "If all the other coalition possibilities have been explored, there is no option but for the Christian Democrats and Social Democrats to form a grand coalition. For that to happen, Schröder and Merkel would withdraw and hand over the reins to others."

Klaus Wowereit, the Social Democratic mayor of Berlin, already suggested this possibility in a television interview. "Under certain circumstances," he said, "the Social Democrats would enter a grand coalition without Schröder."

Wowereit did not say who would replace Schröder, but there was speculation it could be Peer Steinbrück, the former Social Democratic premier of the western industrial state of North Rhine-Westphalia.

Wowereit did not say under what circumstances Schröder would resign. His comments, however, confirmed some of what party leaders were thinking.
 The senior Social Democrat said that Schröder, "after having shown he had tried to form a coalition with the smaller parties but had failed, would resign and agree to a grand coalition but only on condition that Merkel did the same."

Also, if Merkel resigns, that might bring into play DoDo's Nightmare scenario, from the Right (see his diary on that).

Stayed tuned!!

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia