Angela Merkel wins German election but far right AfD makes gains

 
Caitlin Morrison
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Angela Merkel Casts Her Ballot In Federal Elections
Merkel casts her vote in the German general election (Source: Getty)

Angela Merkel has hung on as Germany's Chancellor, winning a fourth term in office in the country's general election this weekend, but far right party Alternative for Germany (AfD) made significant gains in the vote.

Merkel's Christian Democratic Union (CDU) party won 33 per cent of the vote, followed by rivals Social Democrat (SPD), with 20.5 per cent - the party's worse performance since 1933.

AfD will now be the third-largest party in the German government, with 12.6 per cent of the vote.

"Of course we had hoped for a slightly better result," Merkel said last night.

However, she added: "We are the strongest party, we have the mandate to build the next government - and there cannot be a coalition government built against us."

Last night, commentators said there were two options available to the incumbent German Chancellor.

"Angela Merkel - who almost surely will remain as chancellor - will have two options, assuming that a government with AFD is out of the question," said economist Claus Vistesen at Pantheon.

"She can form a two-party grand coalition with SPD or she can go for a coalition with the greens—set to gain 9.4 per cent —and FDP. Our bet is on the latter—we doubt the SPD will go into a grand coalition given its after all scathing defeat—but this will be a slender coalition."

Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: "The German election resulted with a disappointing win for Chancellor Angela Merkel’s grand coalition; her victory was spoiled by the rise of the far-right AfD, which made its way to the government for the first time since the World War II.

"Though the presence of the AfD should not significantly impact German intentions regarding the EU in the immediate future, the rising populism dampened the mood in the euro markets."

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