Even though the German federal elections occured several days ago, the situation there still intrigues me.
The CDU/CSU may have to form a "grand coalition" with the SPD, if Merkel cannot create a coalition with the smaller parties (such as the Greens, the Free Democrats or the Left party).
Some commentators in the UK have stated that PR is the cause of these problems. I disagree.
Most countries with PR have generally stable coalitions. Spain, the Republic of Ireland, Australia, the Netherlands and Sweden are all examples of such a thing. In many cases, it is the political culture of a nation which determines the instability of PR (Italy is a prime example of this). Advocates of first-past-the-post are negligent in mentioning that not all elections under this system produce stable governments. What about the 1974 general elections in the UK? When John Major was PM, he had to rely on the support of the Ulster Unionists, simply so the Conservatives could pass legislation and maintain a Commons' majority.
Others have stated that Germany's poor economic performance over the past decade can be attributed to PR. This isn't really the case. In the 1960's and 1970's, West Germany (as it was then) was economically more successful than the United Kingdom, whilst possessing a PR based voting system. It's therefore wrong to state that PR in itself causes economic stagnation. Australia currently has a healthy economy, whilst possessing a PR based system. Germany's current economic problems can be attributed to an inflexible labour market and an extensive welfare system. Such things can easily exist if a government is not a coalition.
IMO, I don't see how libertarians can favour first-past-the-post. This system allows governments great power and therefore the ability to impose force against the individual. A coalition government would rely on consensual politics, in order for a coalition to survive. As libertarians, we must oppose force and seek to reduce its effects in all human interaction.