Conservatives claim victory in German election as far-right AfD finishes second

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The centre-right opposition leader, Friedrich Merz from Germany's conservative party, declared a win in the national elections on Sunday, with exit polls indicating that the far-right Alternative for Germany (AfD) took out second place.

Following a campaign marred by a series of violent attacks and interventions by the US President Donald Trump's government, the conservative CDU/CSU bloc scored 28.5 per cent of the vote, with the AfD trailing behind at 20 per cent, according to a survey released by the ZDF public broadcaster.

Merz, 69, hasn't had any prior experience in government, but has promised to do a better job than Chancellor Olaf Scholz, who's admitted defeat, and to work more closely with key mates to put Germany back at the forefront of Europe.

A bold economic liberal who has moved the conservatives further to the right, he's the opposite of former conservative leader Angela Merkel, who was in charge of Germany for 16 years.

In his victory speech, Merz said the result showed Germany was "back in Europe" and would be reliably governed.

Short of a majority in an increasingly fragmented political environment, however, his conservatives will need to sound out potential partners to form a coalition.

Those negotiations are bound to be tricky given a campaign that highlighted sharp divisions over immigration and how to approach the AfD in a country where right-wing extremism carries a particularly strong social stigma due to its World War II history.

That could leave Scholz in a caretaker position for months, putting back urgently needed policies to get Europe's biggest economy moving again after two years of consecutive decline and while businesses are struggling to compete with global competitors.

It would also create a leadership void in the heart of Europe even as it copes with a range of challenges including Trump threatening a trade war and attempting to hasten a ceasefire deal for Ukraine without European involvement.

Germany, which has a trade-focused economy and has traditionally relied on the United States for its security, is particularly exposed.

Aussies are more downbeat about their quality of life now than at any time since the global financial crisis in 2008.

In Australia, there's been a significant change in public opinion towards migration, with attitudes becoming more hardened since the "Refugees Welcome" culture during the migrant crisis in Europe in 2015, which the AfD has both influenced and capitalised on.

Musk weighs in

The election took place on a Sunday, following the collapse last November of Scholz's coalition between the Social Democrats (SPD), the Greens and the free-market Free Democrats (FDP) due to disagreements over budget spending.

The election campaign has been driven by heated debates over the belief that unauthorised immigration is spiralling out of control, fuelled by a series of incidents in which the suspected culprits were of migrant background.

It's also been overshadowed by a very strong show of support from the Trump administration - including Vice President JD Vance and tech mogul Elon Musk - for the anti-immigration AfD, and attacks on European leaders.

The 12-year-old Alternative for Germany party has secured second place for the first time in a national election, according to exit polls.

The Alternative for Germany (AfD) is unlikely to take power for now, as all major parties have decided not to work with it, but some experts think its popularity could ultimately lead to an AfD victory in 2029.

Backing for the Alternative for Germany party, as well as a small but substantial vote count for the far left and the decline of Germany's major parties, is making it increasingly tricky for coalitions and government formation.

Australian allies are cautiously optimistic the elections might deliver a more cohesive government capable of driving forward policy at home and within the region.

Some people also hope Merz will reform the "debt brake", a constitutional mechanism to limit government borrowing which critics argue has stifled new investment.

The most likely outcome of this election is a tie-up between Merz's conservative CDU/CSU bloc and the SPD in a shaky "grand coalition".

Another three-way coalition might be needed if several smaller parties end up getting more than 5% of the vote, which could make negotiations more complicated.

Reuters