We can finally put the Maggie Thatcher comparisons to rest.

Angela Merkel might be regularly ranked the world’s most powerful woman, but as of Sunday evening she’s never going to become the Iron Lady Chancellor.

Not only did her conservative Christian Democrats (CDU) lose power in Germany’s most populous state of North Rhine-Westphalia (NRW), the defeat has also cost her alliance with the pro-business Free Democrats (FDP) its majority in the upper house of parliament, the Bundesrat.

With Merkel’s government no longer able to ram major legislation through the upper house, which represents Germany’s 16 federal states, her centre-right coalition can now kiss an ambitious legislative agenda goodbye.

But to be fair, it’s not the voters of NRW that have robbed Merkel’s administration of the ability to pursue major reforms – the CDU-FDP coalition did that all on its own from the first day it took office last autumn.

The conservatives and the FDP came to power in October supposedly with a mandate for changes beyond the grasp of Merkel’s last clunky coalition with the centre-left Social Democrats (SPD). But the new government quickly lurched from a shambolic start to political infighting and paralysis.

From the beginning, the conservatives seemed more intent on defending the status quo than tackling the country’s creaky tax, health and educational systems. And instead of giving the Christian Democrats the backbone to push through difficult changes, the Free Democrats appeared focused on rewarding special interests close to their own party after 11 long years in the opposition.

Even while holding a majority in the Bundesrat, Merkel’s government nearly failed to pass its only major piece of legislation last December due to vehement opposition from several CDU-FDP led state governments. The much derided package of tax cuts and stimulus measures is now likely to remain the coalition’s biggest achievement.

The conservatives were already fighting to bury the big tax cuts wanted by FDP boss Guido Westerwelle. And the two parties could hardly be further apart on healthcare reform. Perhaps worst of all, Merkel and Westerwelle seemed to dither over the EU bailout for bankrupt Greece, putting the euro unnecessarily at risk.

In fact, the now so lamented loss of the upper house does little to change Germany’s political reality – it simply dispels the reformist illusion surrounding Merkel’s centre-right coalition once and for all.

Of course, consensus-loving Germans never wanted her to pursue a radical Thatcher-like agenda anyway. But at least now they know they have an administrator sitting in the Chancellery rather than wannabe visionary.