Friedrich Merz wins Germany's federal election and plans coalition government

Friedrich Merz, leader of Germany's conservative CDU/CSU bloc, won the federal election with 28.6% of the votes. He plans to quickly form a coalition government, likely with the Social Democrats, who received 16.4%, their worst result since World War II. The far-right Alternative for Germany (AfD) gained 20.8% of the vote, becoming the main opposition party. This marks a significant rise in support for far-right parties in Europe. The CDU and SPD will need to address potential conflicts over social welfare and migration. Merz faces pressure to form a government amid economic challenges and geopolitical tensions. Investor confidence has increased, anticipating a more business-friendly agenda. The new government will need to navigate complex issues, including Germany's relationship with the US and China.