German voters ousted Schroeder's government Sunday but didn't give Merkel a parliamentary majority, leaving Europe's largest economy — beset by high unemployment, sluggish growth and budget deficits — rudderless.
Both Schroeder and Merkel claim a mandate to be the next chancellor, a dispute to be settled in coalition talks beginning Thursday among Germany's political parties. But the outcome is far from clear: one could win, or both could conceivably be overlooked by their own parties.
Merkel was confirmed as parliamentary leader by 219 of 222 deputies from her Christian Democrats and their allies, the Bavaria-only Christian Social Union. She got the endorsement despite disappointment over her party's showing Sunday.
"Today's vote underlined that as the strongest bloc in parliament, it is up to us to build a government," Merkel said. "We are faced with a challenge that is difficult, but solvable."
The Christian Democrats and Christian Social Union together barely finished first, with 35.2 percent, compared with 34.3 percent for the Social Democrats. Pre-election polls had shown them leading by up to 20 points.
Schroeder called for coalition talks without "any form of preconditions" to end Germany's political confusion. He didn't repeat his earlier demand that the Social Democrats would enter the government only with him as chancellor.
"It's about exploratory talks — a phase in which we must talk to one another about how one will bring about a stable government, which we need at this time," Schroeder said at a news conference. "Any form of precondition would, as I see it, be inappropriate."