“I’m not going to talk around the issue. It’s been a bitter day,” said Frank Walter Steinmeier as he clenched his jaw. His eyes appeared misty as he conceded defeat at Willy Brandt House, the headquarters of the Social Democratic Party.

The Social Democrats have seen their worst result since World War Two in Germany, polling just over 22%. Demographic analysis by German broadcaster ARD shows that half their electors have left them since former leader Gerhard Schröder first won office in 1998.

Going to the polls with vacant slogan (“our land can do more”), after 11 years in government even Steinmeier’s jocular image couldn’t save his party. Voters rated him almost as highly as popular chancellor Angela Merkel — but after four years as foreign minister in Merkel’s coalition, Steinmeier might as well have been a Christian Democrat.

And that was part of the problem for the party. Having nearly bested Merkel four years ago, the Social Democrats opted to join her first government as the junior partner. (They could have gone into opposition, in turn forcing Merkel’s CDU to cobble together an unstable and untried three-party government with the Greens and the pro-market but “small l liberal” Free Democrats).

This meant that the Social Democrats weren’t able to distinguish their party from the Christian Democrats this time around. They’d signed off on every decision over the past four years, including a raise in the retirement age to 67. More than 60% of voters polled today complained the party has lost the courage of its social democratic convictions.

And when it came to the election campaign, Steinmeier at times seemed less an adversary than Merkel’s chum. Indeed, he didn’t seem sure what position to take in relation to his own government. The leader’s debate between the two major parties was so convivial that the Bild tabloid declared the whole thing a “yawn”.

Lacking a strong critical position in relation to Merkel’s government, the SDP instead repeatedly warned of a potential coalition between the FDP and Merkel’s CDU after the vote. A minor party (which won less than 10% of the vote four years ago) was elevated to a major party’s bete noire.

Vying for second place in another Merkel coalition, the SDP was awarded second place by the voters. Meanwhile, its chief adversary during the campaign (the FDP) is now the clear third force in German politics, winning nearly 15%. The party is, serendipitously for Merkel, an easy fit: hence her easy decision to partner-swap.

Meanwhile, the Left Party has skimmed off a significant number of SDP voters, perhaps benefiting from the larger party’s perceived “me-tooism”.

Founded by dissidents from the SDP and former East German communists two years ago, the Left has successfully distinguished itself from the other parties. Led by former SPD leader Oskar Lafontaine, the party presents itself as the defender of the welfare state. Lafontaine has also condemned Germany’s participation in Afghanistan, at a time when the deployment lacks public support.

The Left will have even more opportunity to critique pro-market policies in the aftermath of the election. The FDP campaigned on the need to sink taxes, and unfair dismissal laws will return to the agenda.

However, Merkel is unlikely to turn into a free-market American-style conservative in her second term. Just a week ago, she proposed a tax on finance markets transactions, long a policy goal of the Left Party.

Indeed, Merkel’s hardly a conviction politician. She’s able to change coalition parties so effortlessly because ideology isn’t an important factor for her. Rather, her style of governance is pragmatic, even principle free.

Her parties’ loyalists might have chanted “Angie” as she claimed victory, but Merkel has never been the sort of leader who hugs children or slurps beer to please the public. Indeed, she flew to the G20 leaders’ summit in Pittsburg last week instead of stump-campaigning.

Competence, rather than media skills are her chief boast. In an age where charismatic politicians are dominant in North America and Europe, Merkel and Kevin Rudd are the technocratic exceptions.

That leaves some cold. Joschka Fisher, who served under Gerhard Schröder as foreign minister, complained in French newspaper Le Monde that Merkel’s magpie style of governance is bad for Germany.

“Merkel doesn’t really lead,” he explained. “She tried to once, when she was leader of the opposition in 2005, and she nearly was done in by her explicitly neo-liberal program” [in the elections that year].

“So she drew conclusions from this: she has, since, eliminated any audacity, and simply adjusts herself to whatever is the dominant thinking.

“That’s not what I call leadership”.

It might not please Fisher, but it certainly pleases the voters enough — for now. Merkel continues on as chancellor, her party the least unpopular major party. And (if you believe the polls), Frank Walter Steinmeier’s debacle in Berlin tonight seems like a harbinger of New Labour’s fate in the UK.