Friedrich Merz, CDU/CSU, chancellor candidate and leader of the German Christian Democrats (CDU).
Johannes Simon | Getty Images News | Getty Images
The conservative alliance made up by the Christian Democratic Union (CDU) and its sister party the Christian Social Union (CSU) is set to lead Germany again following the federal election on Sunday, bringing an end to a period of political instability that has dogged Berlin for months.
The center-right CDU-CSU won 28.6% of votes, with the far-right Alternative for Germany (AfD) coming in second place with 20.8%, while the center-left Social Democratic Party (SPD) came in third with 16.4% of the vote, according to preliminary results from the Federal Returning Officer.
The results, which will be confirmed later on Monday, mean the CDU-CSU’s candidate Friedrich Merz will likely be installed as Germany’s next chancellor, taking over from the SPD’s Olaf Scholz after his three-party coalition collapsed late last year.
“We have won it because the CDU and CSU worked well together and we prepared very, very well for this election and also for taking over governing responsibility,” Merz said on Sunday as exit polls emerged, signaling the alliance’s victory.
Supporters hold up signs reading “Chancellor” and “Merz” during the final campaign event of Germany’s Christian Democratic Union party in Munich, on Feb. 22, 2025.
Alexandra Beier | Afp | Getty Images
The win for the Christian alliance brings an end to a period of uncertainty in Europe’s largest economy, although there could now be weeks of political horse-trading as a coalition government is formed.
The most likely outcome is for the CDU-CSU to form a two-party coalition with the SPD, a tried and tested coalition formula in Germany, although a three-party coalition made up of the CDU-CSU, SPD and Greens is also a possibility.
Merz had already ruled out forming any governing alliance with the anti-immigration, populist AfD party, which saw its best election result ever on Sunday.
Merz “clearly has a mandate to form a new government,” David McAllister, CDU politician and member of the European Parliament, told CNBC Monday.
“He will be a very good chancellor because I know him for many years, we can absolutely trust this man and hopefully he can bring confidence back, he can restore confidence in Germany, that is his main task and I wish him all the best for that.”
From ‘debt brake’ to Trump
European markets have had a somewhat muted reaction to the election result although Germany’s DAX stock market index opened around 0.4% higher on Monday.
But despite this respite, the new German government has a lot to contend with.
Political division in Berlin has been seen as an undesirable distraction by investors who warn that Germany must overcome a series of challenges. These include an economic malaise that has gripped the country in recent years,