BERLIN (Reuters) - Germans will vote on Sunday in a parliamentary election in which center-right Chancellor Angela Merkel is running for a fourth term. Here is an explanation of how the voting system works: Germany has a mixed-member proportional voting system under which voters cast two ballots: one directly for a candidate in his or her constituency and the second for a party. This second vote determines the distribution of seats in parliament. Merkel s name, for instance, does not appear on the national ballot but only in her constituency in the Stralsund/Ruegen district. She is running there as a direct candidate for her Christian Democrats (CDU) after winning the district seven times in a row since reunification in 1990. German voters sometimes split their ballots to give their preferred coalition extra support: They give their first vote to a direct candidate from one of the two main parties - the CDU and its Bavarian sister party CSU or the center-left Social Democrats (SPD) - and the second vote to a corresponding smaller partner such as the business-friendly Free Democrats (FDP), the left-leaning Greens, the far-left Die Linke or the far-right Alternative for Germany (AfD). The smaller parties have little interest in the first ballot because Germany s 299 constituencies are won on a first past- the-post basis, which normally favors the larger ones. Supporters of smaller parties often give their first vote to one of the two bigger parties, while some CDU/CSU and SPD backers give their second vote to a preferred coalition partner. If the CDU/CSU or SPD wins more direct seats in a state than they would get based on their share of second votes, the Bundestag creates extra  overhang  seats. There are 299 seats in parliament for winners of the direct seats and another 299 seats based on parties  relative strength via the second ballot. The number of overhang seats rose in recent elections because the two main parties, CDU/CSU and the SPD, won all but a handful of the 299 direct seats but had been receiving smaller shares of the second ballots. A new law compensates other parties for overhang seats, thus making it less interesting for the big parties to share support with smaller partners for second votes. In the 2013 election, the CDU/CSU won four extra overhang seats. Through the effect of balance seats, the size of parliament ballooned from 598 to 631 seats. Parties that fail to get more than 5 percent of the nationwide vote or win fewer than three seats by direct election are excluded from parliament. The shares of the other parties are recalculated accordingly. This effect can have major consequences for the process of coalition building. In 2013, the FDP and the AfD came in just below the 5-percent threshold. Since their share of the vote was attributed to the others parties, Merkel s conservatives were nearly able to govern alone with their unadjusted result of only 41.5 percent. In this year s election, six parties are forecast to enter parliament, up from four now. That would leave Germany marked by a more fractured political landscape. The next government will probably need a combined share of at least 47 percent or maybe 48 percent for a stable majority, depending on the voting share of those parties that fail to enter parliament. 
Factbox: Germans have two ballots in complex election system