Germany’s centre-left Social Democrats have narrowly beaten outgoing Chancellor Angela Merkel’s centre-right Union bloc in a national election on Sunday.

Germany’s election officials said that the Social Democrats received 25.9% of the vote, ahead of 24.1% for the Union bloc after a count of all 299 constituencies showed.

This is the first time that a winning party in a German national election has bagged less than 31% of the vote. The unprecedentedly tight result points toward a closely fought race that will determine who will lead Europe’s biggest economy in the post-Merkel era.

The outgoing vice-chancellor and finance minister, the Social Democrats’ candidate Olaf Scholz said that the outcome was “a very clear mandate to ensure now that we put together a good, pragmatic government for Germany.”

Despite their worst-ever performance in a federal election, the Union bloc – consisting of the Christian Democratic Union of Germany and the Christian Social Union in Bavaria – said that it would soon reach out to smaller parties to discuss forming a government.

Governor of North Rhine-Westphalia state Armin Laschet, who secured the nomination to succeed Merkel, oversaw the Union’s worst showing since securing 31% in 1949.

Talking to the supporters, Laschet said, “Of course, this is a loss of votes that isn’t pretty.”

Laschet told supporters that with Merkel departing after 16 years in power, “no one had an incumbent bonus in this election. We will do everything we can to form a government under the Union’s leadership, because Germany now needs a coalition for the future that modernizes our country.”

Both Laschet and Scholz will now turn their focus to the third-placed Greens, who have been tipped as the kingmakers after securing 14.8% of the vote, an improvement over their 2017 performance. Free Democrats will also play a decisive role after raking in 11.5% of the vote.

Despite ruling Germany for 12 of Merkel’s 16 years in power under the “grand coalition”, the Union and Social Democrats are unlikely to repeat the alliance after years of governmental power struggle.

CDU chief Laschet said, “Everyone thinks that … this ‘grand coalition’ isn’t promising for the future, regardless of who is No. 1 and No. 2. We need a real new beginning.”

The Free Democrats have suggested that the Greens should make the first move in coordination with them.

Free Democrats leader Christian Lindner said, “About 75% of Germans didn’t vote for the next chancellor’s party. So it might be advisable … that the Greens and Free Democrats first speak to each other to structure everything that follows.”

A full breakdown of the result by seats in parliament is yet to be confirmed, due to Germany’s complicated electoral system.

Outgoing Merkel will remain in a caretaker role until a new government is announced. The mercurial leader, who has been lauded for steering Germany through several major crises, won’t be an easy leader to follow. Her potential successor is set to have their hands full with overseeing the country’s recovery from the coronavirus pandemic and the traditional differences of opinions among Germany’s leading parties over taxation and the policy matters of tackling climate change.

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