Live Blog

German Federal Election Results

Angela Merkel, Germany's chancellor and Christian Democratic Union (CDU) leader, speaks during an election campaign rally in Hamburg, Germany, on Wednesday, Sept. 20, 2017

Photographer: Krisztian Bocsi/Bloomberg

Sunday September 24, 2017
Welcome to TOPLive. We'll be blogging the outcome of the German federal election. We'll go live just before voting ends at 6:00 p.m. local time. Join us for news, analysis and market reaction.

Photographs: Alex Kraus, Krisztian Bocsi/Bloomberg
Hi, I'm Eddie Buckle, one of Bloomberg's European government editors. Along with Berlin bureau chief Chad Thomas I'll be taking you through the next few hours as we find out the results of Angela Merkel's bid for a fourth term as German chancellor.

Germans have been electing a new lower house of parliament, the Bundestag, and when polling booths close at the top of the hour we'll be getting the first exit polls from broadcasters. Unlike in Britain, where there was one national exit poll in June's election, there are several different ones in Germany. They’ve tended to be pretty accurate in the past.

Merkel casts her vote earlier in Berlin.
Photographer: Krisztian Bocsi/Bloomberg
Opinion polls during the campaign have been pretty clear: Merkel's Christian Democrats and their Bavarian allies in the Christian Social Union are heading for a big win -- they've been 14 or so points clear of their main challengers, the Social Democrats led by Martin Schulz, in the past week. Schulz's SPD may even be heading for its worst result since World War II.
But Merkel won't have a majority in the Bundestag -- no party has managed one since 1957 -- and the question is what sort of coalition she'll be able to form. The default is yet another "grand coalition" with the SPD, but grassroots Social Democrats may balk at the idea.
Another option, opinion polls suggest, is an unprecedented three-way tie-up with the liberal Free Democratic Party and the Greens. And here's a potential game-changer: If the CDU and FDP can outperform the polls and get to perhaps 48.5 percent combined. It would be a business-friendly coalition that's perhaps Merkel's preferred option.
There's one other element in the mix: the right-wing Alternative for Germany, or AfD, looks set to win Bundestag seats for the first time. It's been creeping up beyond 10 percent in the opinion polls. Can it become Germany's third-largest party? Populism seemed to be on the decline after the Dutch and French elections this year; developments in Germany are casting doubt on that assessment.
The make-up of any coalition could have implications for how euro-area reforms progress. The FDP has said it would be against any more debt relief for Greece -- something that could cause that country's bond spreads over Germany to widen and become more volatile.
The ARD exit poll has a couple of surprises: Merkel's CDU/CSU is well in the lead but with less support than the final opinion polls were suggesting -- it's actually the worst result since 1949. And the AfD has done better than expected and will be in the Bundestag for the first time as clearly the third-largest bloc. Schulz's Social Democrats are set for their worst-ever postwar result. Merkel would be able to continue the grand coalition with the SPD or pursue the untested Jamaica option with the Free Democrats and the Greens, who have done better than expected.
So unlike in the U.K. election, we're not waiting for some specific results now. At some point in the next half-hour, the broadcasters will be issuing their first updated estimates; we'll see how those differ from the exit polls. And those estimates will be regularly updated during the evening as more information comes in.

Then at 8:15 p.m. Berlin time, the leaders of the main parties -- including Merkel and Schulz -- will come together for an hourlong live televised discussion program: the Berlin Round, it's officially called, but it's more popularly known as the Elephant Round. What will the parties have to say about their coalition intentions.
Senior Social Democrat politician Manuela Schwesig tells ZDF TV that the party leadership is united in its determination to go into opposition, so ruling out a grand coalition with Merkel. Schwesig is prime minister of the northern state of Mecklenburg-Western Pomerania. It's been a "heavy defeat" for the SPD, she says.
Here's the bundle of ARD exit poll headlines:

  • Merkel's CDU/CSU to Win 32.5%
  • SPD Set to Win 20.0%
  • AFD Set to Win 13.5%
  • FDP Set to Win 10.5%
  • Left Party Set to Win 9.0%
  • Greens Set to Win 9.5%
Bloomberg reporter Arne Delfs at CDU headquarters reports cheering, but shock at the strong showing of the AfD. Over at the AfD, there were roars of excitement, followed by loud applause, says our man there, Rainer Buergin. Below are the CDU supporters cheering:

Photographer: Odd Andersen/AFP/Getty Images

Here's some early reaction from Thomas Thygesen, head of cross-asset strategy at SEB:

"It looks like marginally less market-friendly than expected. The outcome as such will be Merkel, which was expected, but the mandate going into negotiations about deeper euro integration does not look quite as strong."

"The AFD above 10% suggests that even here the stakes are high: if the European project doesn't fly this time in a way that voters like, Germany could look less politically stable in a few years."
There will be a lot of discussion now of how Merkel's victory is really a defeat and how AfD's 13 percent result is actually a victory. But many of the far-right elements that are now in the AfD used to be in the CDU before. They haven't changed, they've merely formed a separate entity that will oppose Merkel's leadership openly rather than behind the scenes.
Bloomberg FX/rates strategist Richard Jones writes in our sister blog, MLIV:

Based on the first exit polls from the German election, we'll probably see some downward pressure on the euro when markets open. The weak SPD showing makes a grand coalition unlikely, and the 13% from the AfD is a strong result for the euro-skeptic far-right party.

The numbers don't add up for a straight CDU/CSU-FDP coalition and that opens up the possibility of a so-called Jamaica coalition between the CDU/CSU, FDP and Greens. This is a difficult grouping to assemble, given that the Greens and FDP are far apart on many key issues. Expect protracted negotiations and a muddy picture in the coming weeks.
The exit polls may be somewhat skewed: There was a record postal vote in many regions this year. In Berlin, the number of people who voted by mail is above 500,000 for the first time, about 20 percent of the total vote. It's about 10 percent up from 2013.
The Jamaica coalition with the CDU, the FDP and the Greens would have 348 out of 631 seats in the new Bundestag, according to the ZDF calculations, with 316 needed for a majority.
Henrik Enderlein, professor at Hertie School of Governance, analyzes the result on twitter:

Henrik Enderlein @henrikenderlein
Little tweetstorm #btw2017
1/ Don’t expect coalition decision before 15 Oct (day of regional election in Lower Saxony). No gvt before Xmas.
Henrik Enderlein @henrikenderlein
2/ Historically bad SPD result excludes another #GroKo. Party would be killed. Schulz opposition leader. Problem not him but #GroKo.
Henrik Enderlein @henrikenderlein
3/ Historically weak Merkel result in combination with horrible AfD result will strengthen conservatives in CDU-CSU. Not good for Europe.
Henrik Enderlein @henrikenderlein
4/ Pyrrhic victory for Merkel. No straightforward coalition option. #Jamaica Minority government (tolerated by SPD) solution of last resort.