Most foreign media painted a bleak picture of Germany's prospects after the country's inconclusive poll. But with a grand coalition likely to take power, many foreign correspondents feel it may not be the worst option.
The black-red coalition might just tango together on reforms
Germany has been in the grip of political deadlock for over a week as the conservatives led by Angela Merkel huddle with Chancellor Schröder's Social Democrats in a string of exploratory talks to see whether the two can work together in a so-called grand coalition.
Both national and international media is closely following events as the jockeying over prime posts and ministries plays out in the German capital.
Angela Merkel, right, with Bavarian premier Stoiber
At the same time, it's not exactly easy for foreign journalists based in Berlin to explain the tangled negotiations and the quirks of the German political system to their audience back home.
But, as opposed to the gloom that the election result triggered in the EU, many foreign media now seems to think that a grand coalition may indeed still be able to drive the EU's largest economy towards economic and labor reforms.
Foreign hacks optimistic
Pascal Thibaut from Radio France International is confident that a grand coalition would mean anything but stagnation.
"I think there probably will be more reforms," he said. "There are quite a lot of topics -- economic but also social ones where the two parties are able to find a compromise.
"There aren't so many differences on the big issue of taxes too. So, I think it will possible to find a compromise which would be able to satisfy German industry," he added.
Kobayashi Makoto, the head of Japan Broadcasting Corporation in Berlin, was optimistic too, saying it would probably be best suited to serve the interests of voters.
Makoto also pointed out that important bills may in future be passed with a comfortable parliamentary majority.
"They (the grand coalition) would have a huge majority in the Bundestag and the Bundesrat -- there's a huge possibility to go further," he said.
Concerns over reform pace
Others however feel that though the two parties might strike some compromises, the pace of reform might indeed suffer.
Andrew Purvis, who heads the Berlin office of Time Life International, said that a grand coalition in Germany isn't a disaster, but it wouldn't be ideal for the country's much-needed reform process.
Merkel and Schröder
"It clearly would slow the pace of reforms relative to what the CDU (Christian Democratic Party) and most of the business community hope for," Purvis said.
"It would be difficult for the CDU to progress with any attempt to weaken the negotiating power of the unions or other aspects of labor flexibility," he said, adding that he still believed that some progress could be made.
Elina Ravantti, who works for the Finnish Broadcasting Company and whose own country currently has a governing coalition was also skeptical about whether a coalition of the Social Democrats and the conservatives would be able to produce concrete results.
"It depends, if the parties are able to find common ground," she said. "And it's not just common ground, but if they have a clear view of how they want to reform the country, then it might be good. But if they only get this feel-good factor, there won't be so many reforms."
No worries over US-German ties
Doubts over the reform appetite of a grand coalition are also echoed by The Wall Street Journal correspondent David Crawford.
But he rejected allegations that a grand coalition as such would have a negative impact on US investors in their business policy towards Germany.
"I don't think it makes any difference," he said. "I think people are going to weigh a large variety of data and indicators before they make important investment decisions."
All in all, foreign correspondents in Berlin do not look at a grand coalition as a worst-case scenario for Germany.
While such a coalition is highly unusual in Germany with only one such case in all of the country's post-second-world-war history, it's almost a routine situation for some other nations.