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SPD with a slim lead within the race to succeed Angela Merkel

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Olaf Scholz waves on the stage of the SPD headquarters after the estimates were broadcast on September 26, 2021 after the federal election in Berlin.

ODD DIFFERENT | AFP | Getty Images

LONDON – Germany is planning a three-party coalition in Berlin after one of the most important federal elections in the country in recent years.

Early projections on Sunday evening indicated a razor-sharp result, in which the center-left Social Democratic Party received 25.9 percent of the vote, according to ARD.

Angela Merkel’s right-wing bloc from the CDU and CSU was seen with 24.3% of the vote. Merkel is stepping down as Chancellor after 16 years, but her conservative alliance, headed for the worst election result since World War II, could still hold on to power through consultations with other parties and a coalition.

The partial results also indicated that the Greens received 14.5% of the vote. The liberal FDP was seen with 11.5%, while the right-wing party Alternative für Deutschland was seen with 10.5%. The Left Party The Left should get 5% of the vote.

The two top chancellor candidates Olaf Scholz from the SPD and Armin Laschet from the CDU-CSU immediately claimed a government mandate after the exit polls were published on Sunday evening. But coalition negotiations, which could begin Monday, will likely take weeks and possibly months.

“Wait for the final results”

The result was disappointing and a “great challenge” for Germany, Laschet admitted after the elections.

“We cannot be satisfied with the election result,” Laschet told his supporters, according to a Reuters translation.

“We will do everything we can to build a conservatively led government because the Germans now need a future coalition that will modernize our country,” he said.

Another coalition only with the SPD is not likely, added Laschet: “It will probably be the first time that we have a government with three partners.”

Meanwhile, Scholz, the current finance minister and vice-chancellor of the Federal Republic of Germany, said the party “must wait for the final results and then get to work,” according to Reuters.

“It will be a long election night, that is certain, but it is also certain that many citizens voted for the SPD because they want a change of government and because they want the next Chancellor to be Olaf Scholz.”

Possible coalitions

It is still too early for a final result, but the prognoses mean that the SPD or CDU-CSU would have to form a coalition with two other parties, perhaps the Greens and the FDP, in order to achieve a majority.

Germany experts like Holger Schmieding, chief economist at Berenberg Bank, said the exit polls had done little to clarify the prospects for Germany’s next head of government and the composition of the government.

“As expected, a ‘traffic light’ alliance between the ‘red’ SPD and the Greens and the ‘yellow’ liberal FDP as well as a ‘Jamaica’ coalition of Laschet’s ‘black’ CDU-CSU with the Greens and the FDP are possible The SPD and the Greens would probably make an offer to the FDP, while the CDU-CSU and FDP, which are also closely related, would try to get the Greens on board, ”said Schmieding in a research note on Sunday evening.

In order to get the Greens on board in a so-called “Jamaica” coalition (so called because the colors of the parties involved match those of the Jamaican flag), the CDU-CSU might have to make concessions to the Greens, more than the bloc maybe bear it, remarked Schmieding.

Eliminated risk?

While the next Chancellor remains a mystery for the time being, the prognoses seem to dispel investors’ fears that the country could end with a coalition of the SPD, Left and Greens, a government alliance that, according to Schmieding, “could boost trend growth through tax increases, reform reversals and have affected excessive regulations. “

“If the official results confirm the election surveys – a big one, if the results are tight and the high percentage of postal voters of up to 50% could make the election surveys less reliable than usual – we would breathe a sigh of relief. We had such a tail in the exit surveys -Risk scenario assigned a risk of 20%, “he said.

In a conversation with CNBC’s Annette Weisbach on Sunday evening, Florian Toncar, a lawmaker of the business-friendly FDP, said “a good aspect of today’s result is that a left coalition including the extreme left” [Die Linke] probably doesn’t have a majority, that makes a lot of things easier.

Why it matters

The election is significant because it heralds the departure of Merkel, who is preparing for office after 16 years as chairwoman.

The most recent German elections did not bring any real surprises, as Merkel’s re-election was relatively certain. But this election race differs in that it is wide open until the last few days before the vote and too short to be named.

The Greens enjoyed increasing popularity and temporarily took the lead in the polls in April, only to be overtaken by the Social Democratic Party, which has maintained a slight lead in recent weeks.

Merkel’s ruling conservative alliance of the Christian Democratic Union and the Christian Social Union had failed to mobilize the Germans, and around 40% of voters were reportedly undecided in the week leading up to the election, who to vote for.

The CDU and its Bavarian sister party, the CSU, have dominated German politics since 1949, when the parties formed a parliamentary group and ran in the first federal election after the Second World War.

In recent years, the party has fallen out of favor with younger German voters who prioritize green policies and want Germany to invest in and modernize its fragile industries and infrastructure.

Votes took place on Sunday all Sunday from 8 a.m. to 6 p.m. local time in polling stations across the country, although a large proportion of voters opted for postal voting in this election in light of the coronavirus pandemic.

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