What does Jamaica have to do with Germany's national elections? Since the German election on Sunday failed to produce a clear winner, the Jamaican flag, of all things, has been the subject of much discussion in German. The reason is that Germany will need a new coalition government, and it may end up resembling the colors of the Jamaican flag - black, green and yellow.

In German political terms, that is black for the conservatives (CDU/CSU), green for the - well - Greens, and yellow for the Free Democrats (FDP). Meanwhile, Germans who apparently love color-coding their politics also talk about a "stoplight coalition" of red (Social Democrats or SPD), yellow and green.

If this seems exceedingly confusing, it is because German voters have produced an election result that makes it all but impossible to construct a government that makes sense. Neither Social Democratic Chancellor Gerhardt Schroeder nor his challenger, conservative Christian Democrat Angela Merkel, received the 50 percent needed to form a government. Both have claimed victory, though the conservatives now have three more seats in the German parliament than the Social Democrats (225 to 222), and they each have 30 days to see what kind of coalition they can patch together to present to the German president.

One day after the election, the other topic of discussion in Germany - along with the Jamaican flag - was "new elections." In other words, there is real reason to be concerned that Europe's largest country and its biggest economy, at the heart of the European Union, is headed for a period of troubling political instability for the first time in half a century. This should be of great concern to other Europeans and to the United States as well, for whom Germany is an important international partner. On the financial markets the Euro took a nosedive as a consequence, falling to a seven-year low against the dollar.

It goes without saying that the election result is of concern to the Germans most of all. As a people, Germans intensely dislike uncertainly of any kind, having experienced enormous turbulence in the first half of the 20th century, including the crashing governments of the Weimar period, Nazi dictatorship and defeat in two World Wars.

Part of the problem Germany faces today is a deep and widespread yearning for security in changing and unpredictable world. This makes German workers unwilling to accept cuts in their pensions and other generous welfare-state provisions, resentful of suggestions that their cherished six-week vacation is a thing of the past, and fearful of losing their guarantees of lifelong employment.

In today's competitive, globalized economy, the comfortable German life-style has made Germany intensely uncompetitive and brought economic growth and job creation to a virtual stand-still. The German birthrate is below replacement level (as is most of Europe's), a pension crisis is looming and the federal debt is climbing. Both Mr. Schroeder and Mrs. Merkel know these problems have to be tackled - which may be why the German electorate ended up disliking both. Just three days before the election, 30 percent of German voters remained undecided.

During his time in office, Mr. Schroeder did attempt much-needed pension and labor-market reforms, and as a consequence become deeply unpopular. In order to salvage his lagging campaign, Mr. Schroeder's party again fell back on anti-Americanism, which helped deprive his opponent of an otherwise predicted victory. In a completely outrageous move, campaign posters for the Social Democrats attacked Mrs. Merkel by showing flag-draped coffins of American soldiers over the line "She would have sent [German] soldiers " to Iraq, of course.

Many of us had placed our hopes on Mrs. Merkel, who has been compared with Margaret Thatcher. Hailing from the former East Germany, Mrs. Merkel has a healthy appreciation for Western values, freedoms and market economics. Her platform would open up the German economy, introduce a flat tax and focus on rebuilding relations with the United States, and turn the focus of German foreign policy away from France. Though lacking in the charisma Mr. Schroeder possesses in spades, Mrs. Merkel has the right prescriptions for reforms that would get Germany back on course.

Even if Mrs. Merkel does succeed in constructing a "Jamaica coalition," dependence on Germany's Green Party would certainly dilute her reform agenda. Germany's Green Foreign Minister Joschka Fischer for one has made it clear that it would be without him personally. As he told German television, "I don't see myself sporting dreadlocks."

Helle Dale is director of the Douglas and Sarah Allison Center for Foreign Policy Studies at the Heritage Foundation.