Only few things were clear before Germany’s 2021 federal election on September 26^th:

• The end of Angela Merkel’s time as chancellor, as she announced already in 2018 that – after 16 years in office – she would not run for a 5^th
• The end of the so-called “grand coalition” between the center-right CDU/CSU and the Social Democrats, traditionally Germany’s two leading political blocks.

After a turbulent election campaign – SPD, CDU/CSU and Greens have seen 10-point swings in their poll ratings since the start of the year – polls are now closed and the results are in. But most questions about Germany’s new political balance remain wide open.

The Social Democrats (SPD) won a rather narrow victory. Preliminary results announced early on Monday see the SPD at 25.7 %, a significant improvement on the 20.5 % it obtained in the election four years ago.

Support for the centre-right CDU/CSU of outgoing chancellor Angela Merkel plunged to a historic low. The Christian Democratic Union, in alliance with its Bavarian sister party CSU, won 24.1 % of the vote, the worst national result ever.

The Greens came in third with 14.8 %. Although this is less than many observers had predicted, it is still their best result in a federal election to date and up significantly from four years ago (8.9 %).

The pro-business Free Democrats (FDP) received 11.5 % of the votes.

The more radical parties on the left and the right – the Left Party (Die Linke) and the populist right Alternative for Germany (AfD) – both fared worse than they had hoped for. While the AfD obtained 10.3% (down from 12.6% in 2017), the Linke dropped to 4.9 %, failing to clear the 5% threshold, but scraping into the Bundestag on account of having won three constituencies outright.

Coalition Options

On the basis of Sunday’s results, a whole range of coalitions are theoretically possible. In reality, however, only three likely options remain. Here’s an overview:

• SPD + Greens + FDP (so-called “traffic light” coalition): This constellation would enjoy the clearest majority among realistic options. Biggest challenge: Among a strong majority of the FDP’s base, a coalition with two left-of-centre parties is highly unpopular.
• CDU/CSU + Greens + FDP (“Jamaica”): An attempt to form such a coalition failed after the federal election in 2017. It is the only option for Armin Laschet – Angela Merkel’s supposed successor – to become chancellor. Greatest obstacle: Strong competition and ideological friction between the Greens and FDP and a strong preference among the Greens’ base for a left-of-centre coalition.
• SPD + CDU/CSU (“Grand Coalition“): This would be a continuation of the currently existing coalition, albeit under SPD leadership and with Olaf Scholz, Germany’s current Finance Minister, as Chancellor. There is wide-spread aversion to such a continuation as a government consisting of Germany’s traditionally leading parties has always seen as an anomaly, something that wasn’t “right” (the current coalition only came together after all other efforts had failed after the 2017 election). Such a continuation would also inevitably be perceived as the stark opposite to the “fresh start” that a strong majority of voters and pundits appear to be longing for.

And Now What?

Awkwardly, neither the SPD nor the CDU/CSU will be able to form a two-party coalition government with just their preferred partners, the Greens and the FDP, respectively. Attempts to form a three-way coalition, however, are likely to result in drawn-out coalition negotiations as both big parties will be competing to get the Greens and the FDP to join them; there could be weeks or even months of messy coalition negotiations ahead.

In initial reactions, Olaf Scholz, the current Finance Minister and the SPD’s candidate for chancellor, was adamant that he should lead coalition talks: “A lot of people voted for the SPD because they wanted a change of government and wanted the next chancellor of this country to be Olaf Scholz,” he said.

Despite the CDU/CSU’s poor showing, its candidate for chancellor Armin Laschet said he, too, had earned the right to try to form the next government: “We will do everything we can to form a government under the leadership of the CDU/CSU,” he said at the party’s headquarters in Berlin on Sunday evening.

Laschet sounded more reserved on Monday, however. He is said to have stated in internal discussions that “no one can derive a claim to govern for the CDU/CSU from the election results,” adding that the CDU/CSU would stand ready to form a government if the SPD fails to do so with the Greens and the FDP.

Hinting at the FDP’s and Greens’ status as kingmakers, FDP chairman Christian Lindner suggested his party should confer with the Greens first “to structure everything that comes afterward,” since those two parties had challenged the “status quo of the grand coalition” currently ruling.

Observes have noted the risk that Berlin will go into a state of semi-paralysis, just as it did during the protracted talks that followed the last Bundestag election in 2017. Yet this is a time when Germany badly needs to plan its recovery from the coronavirus pandemic and prepare for its presidency of the G7 in 2022.

With big differences to overcome, coalition talks are likely to drag on for weeks. There is already speculation that Merkel will have to remain as acting chancellor for months, possibly into 2022 — though both Scholz and Laschet said it was their “ambition” to form a new government sooner.

Summary: What To Expect?

• In all likelihood, three parties will be needed to form a government. Yet another continuation of the “Grand Coalition” between SPD and CDU/CSU is an undesired and unlikely option.
• Scholz (SPD) is the favorite for leading the new government, with still remaining chances for Laschet (CDU/CSU).
• It is unclear how and under whose leadership coalition negotiations will take place. There is no “manual” for the situation as it is.
• A prolonged period of difficult discussions and negotiations between the parties involved is likely.
• Predictions on a new government’s priorities in individual policy fields are very speculative at this stage. Depending on the unpredictable momentum of coalition talks, everything might be subject of negotiations and difficult compromises will need to be made.
• Germany’s ability to lead on the international stage looks questionable for the foreseeable future.