Germany faces prolonged economic uncertainty after fragmented election results

Germany's recent election has led to a fragmented parliament, complicating coalition talks. The opposition conservatives, led by Friedrich Merz, won, while the far-right Alternative for Germany (AfD) achieved its best result yet. The uncertainty surrounding coalition formation may prolong economic stagnation. It remains unclear how many parties will secure seats, affecting whether a two-party or three-party coalition will form. Proposed tax cuts could improve Germany's competitiveness, but reaching agreements on budgets and reforms may be challenging. The outcome of these talks will influence consumer and business confidence in the economy.