(Bloomberg) -- German voters are heading to the polls Sunday in a watershed election to decide who will follow Angela Merkel as leader of Europe’s biggest economy.
Merkel’s finance minister, Olaf Scholz of the center-left Social Democrats, is the narrow favorite to succeed her, although he’s seen his lead squeezed in the final days to within the margin of error.
Merkel’s conservative bloc is heading for its worst result ever after its candidate, Armin Laschet, struggled to mobilize voters. And yet the party still has a shot at clinging on to the chancellery if enough of its traditional voters return to the fold at the last minute.
Exit polls will be published at 6 p.m. in Berlin when voting ends. Terminal readers will be able to follow our live blog from 5:45 p.m. and Bloomberg Television will be reporting from the headquarters of the main parties as the results come in.
There are three other parties that you need to watch out for.
The Greens were the early front-runners but have seen their support decline steadily over the course of the campaign. Both the SPD and the CDU/CSU are counting on them as a potential coalition partner. But their hand could be weakened if they underperform polling projections -- as they did last time.
The liberal FDP has been trailing in fourth place in polls throughout the campaign. They will come into their own during the coalition negotiations. If Scholz or Laschet need a third party to secure a majority, FDP leader Christian Lindner will be in a strong bargaining position and he’s a potential finance minister with a strong commitment to budget austerity.
The Left party has been mired in sixth place but small shifts in their vote could have big consequences. If they win enough seats to give the SPD a majority with the Greens, then Scholz will come under pressure from his base to talk to them, and that could mean a lurch to the left for Germany. If they slip below the 5% threshold for taking seats in the next parliament, a two-party coalition between the SPD and the Greens might be on, giving Scholz a much freer hand.
Whoever does emerge as the leader of the next government will inherit a long list of challenges. Merkel steered Germany through financial crises, a wave of immigration and the Covid-19 pandemic. But she also put off tackling some of the long-term problems facing the country.
Click here for a graphics project that sets out the challenges awaiting her successor.
20th Century Power
For generations, Germany’s industrial muscle has been built around the strength of its car companies. Now the shift to electric transmissions poses a unique threat to an engineering culture that has been wedded to the internal combustion engine.
Bloomberg Businessweek took an in-depth look at how Germany’s auto industry is trying to keep up.
The Comeback Kid
Few people gave 63-year-old Olaf Scholz a chance when the campaign kicked off with the SPD languishing in third place and its support at record lows. But Scholz has been plotting his assault on the chancellery for years and he was confident the plan would pay off.
Click here for the inside story of an unlikely campaign. And here for an analysis of what a Scholz victory might mean.
©2021 Bloomberg L.P.
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