Conservative leader Friedrich Merz declares victory in German election

Germany's conservatives won Sunday's elections, with their leader Friedrich Merz set to become the next chancellor, followed by the far-right AfD in second place after record gains, according to exit polls.

Germany’s conservatives won the national election on Sunday but a fractured vote handed the far-right Alternative for Germany (AfD) its best ever result in second place and left conservative leader Friedrich Merz facing messy coalition talks.

Merz, who has no previous experience in office, is set to become chancellor as Europe’s largest economy is ailing, its society split over migration and its security caught between a confrontational U.S. and an assertive Russia and China.

After the collapse of incumbent Olaf Scholz’s unloved coalition, Merz, 69, promised cheering supporters his government meant making Germany “present in Europe again, so that the world notices that Germany is being reliably governed again.”

“Tonight we will celebrate, and from tomorrow we start working. … The world out there is not waiting for us.”

U.S. President Donald Trump, whose ally Elon Musk had repeatedly endorsed the AfD during the campaign, cheered the conservative victory on Truth Social.

“Much like the USA, the people of Germany got tired of the no common sense agenda, especially on energy and immigration, that has prevailed for so many years,” Trump wrote.

Following a campaign roiled by violent attacks for which people of migrant background were arrested, the conservative CDU/CSU bloc won 28.4% of the vote, followed by the AfD with 20.4%, said a projection published by ZDF broadcaster.

All of the mainstream parties have ruled out working with the AfD, which looks set to double its score from the previous vote and saw Sunday’s result as just the beginning.

“Our hand remains outstretched to form a government,” leader Alice Weidel told supporters, adding “next time we’ll come first.”

MERZ’S JUGGLING ACT

Merz is heading into what are likely to be lengthy coalition talks without a strong negotiating hand. While his CDU/CSU emerged as the largest bloc, it scored its second worst post-war result.

It remains unclear whether Merz will need one or two partners to form a majority, with the fate of smaller parties unclear in a way that could jumble parliamentary arithmetic.

A three-way coalition would likely be much more unwieldy, hampering Germany’s ability to show clear leadership.

Chancellor Scholz’s Social Democrats (SPD) tumbled to their worst result since World War Two, with 16.4% of the vote share, and Scholz conceding a “bitter” result, according to the ZDF projection, while the Greens were on 12.2%.

Strong support particularly from younger voters pushed the far-left Die Linke party to 8.9% of the vote.

The pro-market Free Democrats (FDP) and newcomer Sahra Wagenknecht Alliance (BSW) party hovered around the 5% threshold to enter parliament.

Voter turnout at 83% was the highest since before reunification in 1990, according to exit polls. Male voters tended more towards the right, while female voters showed stronger support for leftist parties.

Policies of Friedrich Merz

ECONOMY

The CDU wants to cut red tape, encourage investments and reduce energy prices to boost the economy.

It wants to lower electricity taxes and grid fees, expand renewable energy, power storage and nuclear power research. It would abolish Germany’s supply chain due diligence law.

The party promises to support industry through digitalisation, sovereign AI, and cloud applications. A Digital Ministry would be established along with a “Startup Protection Zone” to shield new companies from red tape.

FINANCE

The CDU wants to cut corporate tax to a maximum of 25% from an average of 29.9%. It wants to maintain a tax benefit for married couples and give more tax benefits for children.

Other parties have criticised the CDU, arguing that the party does not spell out how all the promised tax cuts would be financed.

The CDU has pledged to retain Germany’s debt brake, a constitutional mechanism that caps the federal government’s deficit to a mere 0.35% of output and that has been criticised for stymieing investment. But party leader Friedrich Merz has left the door open to reform the debt brake without spelling out how.

MIGRATION AND BORDER CONTROL

The CDU advocates stricter border controls, faster asylum processing, and deportation for those without legal residency. It calls for a reform of the European asylum law, proposing that applications should be processed in safe third countries rather than within the EU.

The party seeks to limit social benefits for those required to leave, expand the list of safe countries of origin, and suspend policies such as permitting families of refugees with a subsidiary protection status to move to Germany.

It also aims to reverse the current government’s fast-track naturalization policy and restrict people from holding dual citizenship.

At the same time, the CDU plans to simplify the recognition of foreign professional qualifications and create a digital “Work-and-Stay Agency” to streamline recruitment, visas and residence permits for skilled foreign workers.

SECURITY

The CDU advocates for stronger law enforcement measures, including harsher punishments, expedited legal proceedings, and increased surveillance at high-risk locations.

It proposes closing mosques that preach hate and anti-Semitism and promises stronger action against right-wing and left-wing extremist groups.

FOREIGN POLICY

The CDU is committed to complying with the NATO quota of 2% of gross domestic product on defence spending as a minimum. It wants to reintroduce mandatory military service and lead an initiative for a European missile defence system.

The party has been against common European borrowing for defence, although Merz earlier this month said he would be open to discuss options on how to finance an increase on defence spending.

It advocates stronger transatlantic ties with the U.S. and renewed cooperation with France and Poland. It backs Ukraine with diplomatic, financial, humanitarian, and military aid. It supports Israel and backs a two-state solution.

The party calls for reducing reliance on China.

CLIMATE

Under the “Yes to Cars” policy, the CDU opposes measures such as inner-city driving bans, parking space reductions, and a general highway speed limit.

It advocates lifting the EU’s planned combustion engine ban, reviewing fleet emission limits, and preventing penalties for carmakers failing to meet emissions targets while also expanding electric vehicle charging infrastructure.

The party seeks to abolish the law phasing out oil and gas domestic heating but supports tax incentives for energy-efficient housing renovations. It also proposes reinstating agricultural diesel subsidies and promote emissions trading.

SOCIAL POLICIES

The CDU plans to boost housing supply by simplifying building regulations, expanding construction zones and promoting social housing investments.

It wants to introduce mandatory preschool language tests for German proficiency and promises to improve student financial aid and to gradually increase child benefits and tax allowances.

It proposes expanding childcare access, increasing tax deductions for childcare expenses, and reversing a law passed last year that cuts regulations for gender transitions.

“A three-party coalition runs the risk of more muddling through and more stagnation unless all parties involved realise that this is the last chance to bring change and to prevent the AfD from getting stronger,” Carsten Brzeski, global head of macro at ING.

CARETAKER SCHOLZ

A brash economic liberal who has shifted the conservatives to the right, Merz is considered the antithesis of former conservative Chancellor Angela Merkel, who led Germany for 16 years.

Merz conditionally supports equipping Ukraine with longer-range Taurus missiles, a step Scholz’s government shied away from, and sees Europe as firmly anchored in NATO.

Sunday’s election came after the collapse last November of Scholz’s coalition of his SPD, the Greens and pro-market FDP in a row over budget spending.

Lengthy coalition talks could leave Scholz in a caretaker role for months, delaying urgently needed policies to revive the German economy after two consecutive years of contraction and as companies struggle against global rivals.

It would also create a leadership vacuum in the heart of Europe even as it deals with a host of challenges such as Trump threatening a trade war and attempting to fast-track a ceasefire deal for Ukraine without European involvement.

Germans are more pessimistic about their living standards now than at any time since the financial crisis in 2008.

Attitudes towards migration have also hardened, a profound shift in German public sentiment since its “Refugees Welcome” culture during Europe’s migrant crisis in 2015, that the AfD has both driven and harnessed.