Fallout from German elections: What next for the European economy?

As anticipated, the Christian Democratic Union (CDU) Party won a plurality with 33% of the vote in the elections to German federal parliament held on Sunday, September 24th. The Pyrrhic victory may have secured Angela Merkel a fourth term as German Chancellor but did not give her enough power to comfortably rule the country. The results of the CDU and its sister party the Christian Social Union (CSU) were its worst showing in nearly seven decades; arguably, what they lost in votes was picked up by the far-right Alternative for Germany (AfD), which gained roughly 12.6% of seats in Bundestag, entering serious politics for the first time since its establishment four years ago.