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Data: Preliminary results from German Federal Returning Officer; Chart: Sara Wise/Axios

Germany’s Social Democrats (SPD) pulled off a come-from-behind victory in Sunday’s elections, 10 seats ahead of the Christian Democrats (CDU), which failed to finish top for the first time in 16 years.

State of play: SPD leader Olaf Scholz has said he’ll seek to form a government, but so too has Armin Laschet, Chancellor Angela Merkel’s successor as CDU leader.

  • With a renewal of the unpopular “grand coalition” between the center-left SPD and center-right CDU appearing unlikely, either Scholz or Laschet will need to bring two smaller parties on board to become chancellor.

That means the election’s true winners may be the Greens and the liberal Free Democrats (FDP), which will likely serve as the junior partners in either a “traffic light” (SPD-Greens-FDP) or “Jamaica” (CDU-Greens-FDP) coalition, so named because of the parties’ colors.

  • As the leader of the largest party, Scholz is best-positioned to become chancellor. He has said he wants to move quickly to reach a deal with the Greens and the FDP, but coalition negotiations typically drag on for weeks. After the last election in Sep. 2017, it took 5.5 months to form a government.
  • Coming off the CDU’s worst electoral performance ever, Laschet will have a hard time staking a claim to the chancellery. He may not survive in his position long enough to handle the negotiations himself, as some in his party are reportedly pushing him to resign.

The big picture: The power-political constellation in Germany has shifted after the election, and the next government will likely include three parties with very different platforms for the first time.

  • While the SPD and the Greens are largely pulling in the same direction on many issues — such as the wealth tax or a relaxation of the debt brake — it will be more difficult to reach an agreement with the FDP, which considers tax increases a red line.
  • The liberals would undoubtedly favor a CDU-led coalition, but FDP leader Christian Lindner has announced “preliminary explorations with the Greens” to move toward a common position.
  • Referring to the lack of common ground between the parties on Monday, Greens chancellor candidate Annalena Baerbock joked, “I assume we all love to eat ice cream.”

What to watch: The main “trophy” over which the parties will likely tussle in negotiations is the Ministry of Finance, due to its influence on other ministries and role in vital areas like taxation, climate action and the post-Covid economy. Scholz currently serves as finance minister.

  • The FDP (11.5%) is riding high after a strong result, and Lindner is likely to push for the job.
  • The Greens (14.8%) won more seats than ever before but still fell short of expectations after peaking at around 28% in the polls. Reports in German media suggest Baerbock, is likely to be superseded by party co-leader Robert Habeck as vice chancellor in the next government.

Worth noting: Only around 15% of German voters supported the far-left and extreme-right — 7% less than in 2017. All parties ruled out negotiations with the far-right AfD (10.3%). The Left (4.9%) also lost ground.

  • However, the AfD finished first in two East German states: Saxony (24.6%) and Thuringia (24%).

Go deeper

Sep 27, 2021 - World

Social Democrats' win in Germany could shake up Europe

Olaf Scholz caught the bouquet on Sunday. Photo: Florian Gaertner/Photothek via Getty

BERLIN Angela Merkel's political farewell was spoiled Sunday night when the Social Democrats (SPD) narrowly claimed victory in Germany's elections, just four years after suffering their worst loss since World War II.

Why it matters: The stunning political comeback could swing the balance of power in Germany leftward after 16 years of rule by Merkel's conservative bloc, and it could lay the groundwork for a more ambitious European Union.

Ben Geman, author of Generate
1 hour ago - Energy & Environment

Key clean power provision likely won't survive in Dems' spending bill

A construction worker walks along a dirt road at the Avangrid Renewables La Joya wind farm in Encino, New Mexico, on Aug. 5, 2020. Photo: Cate Dingley/Bloomberg via Getty Images

A pillar of Democrats' plans to speed deployment of zero-carbon electricity is likely to be cut from major spending and tax legislation they are struggling to move on a party-line vote, per multiple reports and a Capitol Hill aide.

Driving the news: The New York Times, citing anonymous congressional aides and lobbyists, reports that West Virginia Sen. Joe Manchin (D) has told the White House he "strongly opposes" the Clean Electricity Performance Program.

Updated 4 hours ago - World

Fatal stabbing of British MP David Amess declared a terrorist incident

Police outside Belfairs Methodist Church in Leigh-on-Sea, England, on Oct. 15. Photo: John Keeble/Getty Images

Authorities have declared the death of David Amess a terrorist incident, hours after the Conservative Party lawmaker in the U.K. was fatally stabbed while meeting with local constituents in a church in eastern England on Friday.

The big picture: The Metropolitan Police has found "a potential motivation linked to Islamist extremism."