Analysis: Germany's turbulent 2005

KEHL AM RHEIN, Germany, Dec. 31 (UPI) -- Record unemployment, nasty business scandals, and an inconclusive general election followed by the appointment of the country's first female leader -- Germany has had quite a turbulent 2005.

In September, the country headed to the polls with the desire to affect change, albeit not by all means. Gerhard Schroeder, chancellor at the time, had been a dead duck before the election but rose to a final surge when, fueled by a fierce election campaign, he brought his Social Democrat Party close to the grip of power again. Campaigning in defense of Germany's costly and increasingly contoversial social welfare system, Schroeder took one last bite out of the conservative voter base.

But in the end, Angela Merkel triumphed to become Germany's first woman chancellor, heading a left-right coalition that took a long time to form.

While Merkel's conservative Christian Democrat Union won the most votes, it failed to reach a majority for its preferred center-right coalition with the Free Democrats.

After the Sept. 18 vote, weeks of political flirting, bargaining and deal-brokering threw Berlin into limbo, causing the world to ridicule the chaos in the once-bureaucratic Germany.

The election had been considered a done deal, after a post-World War II record amount of 5.1 million Germans were unemployed, handing the government of Social Democrats and Greens -- in power since 1998 -- a rapid popularity decline.

Schroeder's welfare market reform Hartz IV, introduced on Jan. 3, enraged the left wing of his party while at the same time failing to cut costs.

Some of the far-left Social Democrats went as far as splitting from the SPD to form an alliance with former communists, which eventually rose to the second-largest opposition party in parliament.

In the country's regional elections, more and more states fell to the conservatives, and then on May 22, Schroeder stunned Germany by calling for early elections because his party lost in North-Rhine Westphalia, an SPD stronghold.

Schroeder's bold step failed to stop the downhill trend. As late as a week ahead of elections, the Social Democrats were hopelessly behind. On Election Day, however, Merkel's conservatives took some seven points less than anticipated.

Politicians in Washington feared that Schroeder, famous there for his anti-American rhetoric that won him much support in Germany, might get another try at the helm of government.

President George Bush visited Germany in February, with the Texan and Schroeder portraying big smiles that nearly managed to cover their animosity toward each other.

There were undoubtedly a few sighs of relief when it became clear that Merkel, who had vowed to better ties with Washington, would succeed him in office.

Schroeder since announced he would use his political retirement by working for a Swiss media publisher and a German-Russian pipeline consortium.

Since her formal election as German chancellor on Nov. 22, Merkel has tried to implement measures intended to spark economic growth and lower unemployment.

Her first weeks in office have been tough, as she had to deal with the kidnapping of the first German national in Iraq and some early trans-Atlantic discords over alleged CIA kidnappings, overflights, landings and secret prisons in Europe.

Earlier this month, she rowed in a first success, however, when she helped broker a deal over the controversial European Union budget, mediating between France and Britain.

Year-end data indicates that 2006 might see a boost of the German economy, with unemployment numbers down to 4.6 million and falling, and growth in construction and industry finally setting in.

But Germany's big business had quite a turbulent year itself, with several large firms struggling to stay out of the press for nasty fraud and bribery scandals.

Europe's larges car maker, Wolfsburg-based Volkswagen, tops the questionable list with executives setting up bogus companies to cash in million-dollar bribes and paying prostitutes and exotic vacations with company money. German chipmaker Infineon was rocked by similar scandal, although a bit lesser in extent.

2005 had sad moments: One was when boxing great Max Schmeling, a German sports idol, died on Feb. 2, half a year before his 100th birthday.

But Germany also united in joyful celebration after Cardinal Joseph Ratzinger, from Marktl am Inn, Bavaria, was named Pope Benedict XVI to succeed the late John Paul II. Germany's best-selling daily Bild, known for its racy headlines, titled in bold red letters: 'Wir sind Papst!' (We are Pope!)

Nearly three million people in August celebrated the Pope's first trip to Germany during the World Youth Day, a catholic festival taking place in and around Cologne.

With the economy showing signs of recovery, the next year could be one of moral boost for Germans. But even if the job market doesn't improve, be sure that Germans will celebrate in 2006: It's the year of the FIFA Soccer World Cup, the world's most popular sports event (face it, Olympics and Super Bowl) and it will be held in Germany next June. When Germany last won the cup in 1990, the country celebrated economic prosperity, the fall of the Berlin Wall and Germany's reunification. A pretty good year, that was.