2021 Germany Election Odds: With Merkel Gone, Value Presents Itself

Written By Evan Scrimshaw on September 21, 2021

On Sunday, the German people go to their first election since 2001 without Angela Merkel as the leader of the center right party, and the frontrunner for their Chancellorship. 2021 Germany election odds to replace her has been suitably wild.

With her trademark stability out of the race, the election has been the most exciting one in Germany in some years, and the race is just unstable enough to present some betting value in Germany election odds at PredictIt.

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Who will be chancellor of Germany on Dec. 31?

CandidatePredictit PriceEquivalent Odds
Olaf Scholz$0.69-223
Angela Merkel$0.23+335
Armin Laschet$0.15+567
Annalena Baerbock$0.01+9900
Christian Lindner$0.01+9900
Katja Kipping$0.01+9900
Alice Weidel$0.01+9900
Alexander Gauland$0.01+9900
Bernd Riexinger$0.01+9900
Robert Habeck$0.01+9900
Friedrich Merz$0.01+9900
Norbert Rottgen$0.01+9900
Markus Soder$0.01+9900
A. Kramp-Karrenbauer$0.01+9900
Jens Spahn$0.01+9900
Ralph Brinkhaus$0.01+9900

2021 Germany Election Odds: Who Will Win?

Germany uses a form of proportional representation. So the answer of who will win comes down to who can command a majority in their legislature afterwards, a tricky proposition given there are likely to be six parties in this edition of the Bundestag.

The CDU/CSU union is Merkel’s party, being led by Armin Laschet this time, and facing real pressure from the Social Democratic Party (SPD), led by Olaf Scholz, and from the Greens, who for a while earlier this year were looking like the party likeliest to challenge the CDU.

Other parties who will get sizable amounts of seats are Die Linke, a staunchly left wing party, the Free Democrats of the FDP, a merry band of centrists who worked with Merkel’s party in the past, and the Alternative for Deutschland, an anti-European Union far-right party.

The polls right now are pretty clear that the SPD’s choice of Scholz is going to pay off, with his party having both the momentum and the lead as of now, which will give him the first chance to try and put together a government.

It is nearly impossible to imagine a world where the CDU would be a preferred partner for the Greens. So the chances of a CDU government with the SDP getting the bigger share of the popular vote would be nearly non-existent, and the polls are bad for the right these days.

Scholz to be Chancellor at the end of the year is as close to free money as you can find, because the chances that the Government formation takes so long that Angela Merkel is still in office are vanishingly small. If you want to see why, we can take a look at the markets for what kind of government we will get.

Which parties will be in the next German coalition?

CoalitionPredictit PriceEquivalent Odds
SPD + Greens + FDP$0.57-133
SPD + Greens + Left$0.23+335
CDU + Greens + FDP$0.12+733
SPD + Greens$0.09+1000
CDU + SPD$0.07+1300
SPD + CDU +FDP$0.06+1550
CDU + SPD + Greens$0.02+4900
CDU + Greens$0.01+9900

2021 Germany Election Odds: What Coalition Will Arise?

When you’re trying to coalition build, it’s much easier to start with eliminating combinations than it is to try and actively build them. Let’s start there.

The CDU-Greens-FDP option isn’t going to happen because the CDU are not going to do well enough to have a chance to govern.

Nobody will ever do a deal with the AfD, because that party would be forever crucified in the eyes of every non-AfD voter in the country.

There is no appetite for a SDP-Green-Linke deal, because Linke has a set of foreign policy views that are far out of step with the SDP and Greens, namely their view that the abolition of NATO and the creation of a new defense and security forum including Russia should occur. That policy is a red line for the other parties, and unless they decide to change a fundamental part of their worldview, they will not be in government.

There is no appetite in the CDU to be the junior partner in a Grand Coalition, having seen what has happened to the SDP as the junior partners in the 2005-09 Bundestag, and then in two straight Bundestags since 2013. So what does this leave?

If the SDP and the Greens win enough seats themselves to govern alone, they will. It’s an easy partnership, and they would manage to find an agreement with ease. If they don’t, then the task gets slightly harder for the coalition builders, but not that much harder, because it’s blindingly obvious what the path would be.

The Free Democrats would be the logical third in this government, and while they supported Merkel in the 09-13 Bundestag, Scholz is not particularly left wing or even that ideological. So the chances of ideology getting in the way of a deal is highly unlikely.

Final Thoughts on 2021 Germany Election Odds

Scholz will win. That is my strong belief.

It’ll almost assuredly be a SPD-Green-FDP alliance that gets over the line. However, the chances of a SPD-Green government cannot be ignored. If you want to take both and functionally lock in both possible combinations at a profitable price, go right ahead.

If you want a high-upside, but very volatile, value play, that SPD-Green coalition combination is very attractive.

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