Merz's failure casts shadow for stagnant German economy

The conservative leader was set to face a second vote in parliament on Tuesday in his bid to become chancellor after he lost the first round in a stunning early setback

- Agencies

FRANKFURT: Friedrich Merz' unprecedented failure to win election as German chancellor in the first round of voting in parliament raises doubts about the new government's ability to push Europe's largest economy out of stagnation.

Tuesday's events add uncertainty to an economy that hasn't seen significant growth since before the Covid pandemic.

Above all, Merz was expected to end the squabbling over spending and budgets that plagued predecessor Olaf Scholz's unruly three-party coalition that collapsed in November.

His February 23 election win and coalition deal seemed to provide assurance that his government could confront multiple challenges including lagging investment in pro-growth projects, choking bureaucracy and a lack of skilled labour.

Now that fresh start seems much less certain, economists say. It remains possible that Merz and a coalition between his Union bloc and the center-left Social Democrats will eventually take power in subsequent voting rounds under Germany's constitution. Parliament was voting again on Tuesday afternoon.