Merz’s conservatives push for quick coalition talks after German election win

German conservatives under likely next chancellor Friedrich Merz vowed on Monday to move quickly to try to form a coalition after winning the most votes in a national election that saw far-right and far-left parties gain support from disaffected voters.

Time is pressing for Europe's ailing largest economy, with society split over migration and its security caught between a confrontational US and assertive Russia and China.

The most likely outcome of the election is a coalition of the conservative bloc and Olaf Scholz's Social Democrats (SPD), who came in third, after the far-right Alternative for Germany (AfD) surged to a historic second place.

“From our point of view, (talks) can start very, very quickly,” said senior conservative Christian Democratic Union (CDU) politician Jens Spahn.

“The first talks should certainly be held in the next few days. We see the situation in the world, Ukraine, Russia, the US. German leadership is needed.”

Merz, who has no previous experience in office, has said he aims to have a government in place by Easter.

The snap election came after the collapse of Scholz's unloved three-way alliance with the Greens and pro-business Free Democrats (FDP).

In an early indication of his policy intentions, Merz took aim at the US after his win, criticising on Sunday what he called “outrageous” comments from Washington during the campaign, comparing them to hostile interventions from Russia.

“The absolute priority will be to strengthen Europe as quickly as possible so we can achieve real independence from the US step by step,” Merz said.

His conservative CDU/Christian Social Union (CSU) bloc came in first place with 28.5%, ahead of the AfD with 20.8%, its best ever result, according to provisional results.

Mainstream parties, however, ruled out working with the AfD, a party which is monitored by German security services on suspicion of extremism but has been endorsed by US figures including billionaire Elon Musk.

A major potential headache is that the AfD and Germany's radical Left party together garnered one third of the seats in parliament ,which means they can block changes to the constitution. That could hamper attempts to loosen Germany's strict debt rules and any top-up of special funding for defence. Both parties oppose military aid to Ukraine.

TOUGH TALKS AHEAD

Talks will not be easy and the SPD, which scored its worst result since World War 2 at only 16.4%, has warned its participation in a Merz-led coalition is not automatic.

In the election campaign, Merz promised a radical crackdown on immigration, on which he said he would make no compromises. He also drew sharp criticism from the SPD for pushing a parliamentary resolution on migration last month with support from the AfD.

The move was seen by critics as an unforgivable breach of a political quarantine to keep the AfD out of power. SPD politicians said they could no longer trust Merz. However, the SPD on Monday indicated the door was open to talks.

“If we can find a good basis together, the SPD will be prepared to hold talks because at the end of the day we have to be effective in Germany and we can't just lick our wounds,” said Anke Rehlinger, SPD premier of the state of Saarland.

One key question for the economy will be whether the next government loosens the “debt brake”, a constitutionally enshrined limit on state borrowing that critics said has hobbled efforts to lift Germany out of the economic doldrums.

Merz has signalled some willingness to reform the debt brake.

The good news for Merz, whose CDU/CSU may have won but scored its second worst post-war result, is that he will not have to rely on support from the Greens, who won 11.6%, for an outright parliamentary majority.

The new Bündnis Sahra Wagenknecht (BS) party founded by Sahara Wagenknecht, a former leader of the Left party, known as Linke in German, missed the 5% threshold required to enter the lower house, making coalition arithmetic easier.

FAR-RIGHT PRESSURE

Analysts said the pressure is on for the next coalition to come together quickly not only to provide more leadership to hold its own against US President Donald Trump, but also to fend off the AfD by showing mainstream parties can answer voters' concerns.

If it does not, the 12-year old AfD, which is set to be the largest opposition party in the Bundestag, could be a front-runner for the next elections set for 2029.

“The German economy needs a new federal government capable of taking action very quickly with a stable majority in the democratic centre,” said the head of the BDI industry association Peter Leibinger.

European diplomats are hopeful the next German government will provide more leadership and co-ordinate better with other capitals than the outgoing three-way coalition of SPD, Greens and Free Democratic Party that collapsed in November.

The three parties lost 19.5 percentage points compared with the 2021 election while the AfD and far-left Linke and BS parties together gained about 19.3 percentage points.

Reuters