German Chancellor Vote Fails, Plunging Government into Uncertainty

Berlin, May 6 (Reuters) – A crucial parliamentary vote for Chancellor Friedrich Merz failed on Tuesday, sending shockwaves through German politics and casting a shadow over the stability of Europe’s largest economy. Merz, the leader of the conservative CDU/CSU bloc, had hoped to secure the chancellorship following a federal election victory in February and a subsequent coalition agreement with the center-left Social Democrats (SPD).

However, the secret ballot in the Bundestag, the lower house of parliament, revealed deep divisions and a lack of unwavering support for Merz. He received only 310 votes, falling short of the 316 needed for an absolute majority. This shortfall indicated that at least 18 members of the coalition had broken ranks and failed to endorse Merz.

While the outcome was not necessarily a complete and irreversible defeat, it represented a significant setback for Merz and a major embarrassment. It marked the first time in post-war German history that a chancellor candidate had failed to secure parliamentary backing on the initial vote. Merz, who had campaigned on a promise to revitalize Germany’s economy amidst global instability, now faced questions about his leadership and the strength of his coalition.

The immediate consequences included the postponement of planned trips to France and Poland, where Merz was scheduled to meet with leaders as the newly elected chancellor. The uncertainty surrounding the government’s leadership raised concerns among international partners and within Germany itself.

Bundestag President Julia Kloeckner announced the vote results, noting that 307 lawmakers had voted against Merz, while nine abstained. Merz, visibly shaken by the outcome, engaged in consultations with his colleagues. Party insiders had previously expressed confidence that Merz would secure a comfortable majority, making the failure even more surprising.

Kloeckner adjourned the parliamentary session to allow the parties to regroup and determine the next course of action. A second vote was considered unlikely to take place on Tuesday.

The ramifications of the failed vote extended beyond the immediate political drama. Holger Schmieding, Chief Economist at Berenberg in London, commented, "This is a significant negative. He (Merz) is still likely to be elected, but this shows that the coalition is not united, which could weaken his ability to pursue policies."

Financial markets reacted negatively to the news. German shares, which had been trading near record highs, experienced a decline, while bond yields also dipped. The uncertainty surrounding the political situation contributed to investor unease.

Following the February election, Merz had successfully secured preliminary approval for a substantial borrowing program aimed at boosting defense spending and infrastructure investment. However, this fiscal policy shift had already generated discontent among some of his own supporters, who were wary of relaxing Germany’s strict borrowing limits.

Carsten Brzeski, Global Head of Macro Research and Chief Eurozone Economist at ING Germany, emphasized the challenges ahead, stating, "The government still needs to convince its own supporters that it will be able to deliver." He added, "The failed vote is clearly a sign that not everyone in the CDU agrees with the fiscal U-turn."

The Bundestag now has a 14-day window to elect Merz or another candidate as chancellor. Jens Suedekum from the Duesseldorf Institute for Competition Economics (DICE) highlighted the wider impact of the vote, saying, "The fact that Merz has now failed in the first round of voting sends a devastating signal to society and the economy: the ranks are not united."

The conservatives’ victory in the February election, with 28.5% of the vote, necessitated the formation of a coalition government with at least one other party. The SPD, who secured only 16.4% of the vote, ultimately joined forces with the CDU/CSU, and the two parties signed a coalition agreement on Monday, pledging to implement reforms in Germany.

However, both parties have experienced a decline in support since the February election, with the far-right Alternative for Germany (AfD) gaining ground and even topping some recent opinion polls.

Philipp Koeker, a political scientist at the University of Hanover, warned of the potential long-term consequences of the failed vote, stating, "Merz failing to get elected in the first round casts a dark shadow over the future of the coalition." He added, "Although I expect that he will be elected in the second round, the relationship between the parties will be severely damaged because of this, and (it will) exacerbate the conflicts that are already bubbling beneath the surface."

Germany has been without a stable majority government since the collapse of Olaf Scholz’s SPD-led three-way coalition last November. The country also faces numerous economic challenges, including the threat of a global trade war sparked by U.S. President Donald Trump’s import tariffs, which could trigger a third year of recession. Furthermore, Germany is grappling with the need to adapt its business model to a changing global landscape.

In addition to economic uncertainties, Germany faces security concerns. Trump’s weakening of the U.S. commitment to the NATO defense alliance has prompted European nations to increase their defense spending to assume a greater share of the burden.

The failed vote for chancellor has created a period of political instability and uncertainty in Germany. The coming days will be crucial in determining whether Merz can secure the necessary support to lead the country or whether alternative solutions will need to be explored. The outcome will have significant implications for Germany’s domestic policies, its role in Europe, and its ability to navigate the complex challenges facing the global economy.