Like Bill Clinton in America and Tony Blair in Britain, Schroeder has moved from the left to the middle of the road. And in the process has ousted Helmut Kohl, Europe's longest serving leader.
John Kornblum, the American ambassador, watched the election closely, and sees the result as a changing of the guard rather than a change of policy.
"This is a country which is incremental. It progresses very steadily but rarely rapidly. It changes its views but rarely rapidly. And so I don't expect very much change at all, to tell the truth," Kornblum said.
Unfortunately, one thing that never changes in this country is the far right. The neo-Nazis put up candidates across the country - not one got a seat - but the far right has an ally in Germany's economic stagnation.
"It has to do with unemployment, but not only unemployment. And we have to be very much on the watch. We cannot allow these things to grow. and I am worried that it could grow," said Count Otto Von Lambsdorf, a former cabinet member.
Chancellor Kohl's opponent in this election was the economy. His great legacy - the reunification of Germany after the fall of the Berlin Wall - brought Germany's once booming economy to a halt. The unemployment rate exceeds 10 percent, and almost 20 percent in eastern Germany. And that cost him his job.
Helmut Kohl towered over Germany for 16 years. He will be remembered as a great statesman, the man who reunified Germany and championed the cause of European unity. But he was also the politician who didn't know when to retire.
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