Friedrich Merz, leader of Germany’s Christian Democratic Union (CDU), suffered a historic defeat in his bid to become chancellor, failing to secure the necessary parliamentary votes in the first round. Despite his coalition with the Social Democrats (SPD) holding a 328-seat majority, Merz received only 310 votes—six short of the 316 required for confirmation. This unprecedented setback marks the first time in post-war Germany that a chancellor-designate has failed to be elected in the initial round. The secret ballot revealed unexpected internal dissent within the coalition, with several members reportedly voting against Merz or abstaining. The political uncertainty triggered immediate market reactions. Germany's DAX index fell by nearly 2%, and the euro gave up earlier gains. Analysts expressed concerns that the failed vote could undermine Merz's credibility and authority before even assuming office. Merz's ambitious policy agenda, including a €1 trillion debt-financed programme to modernise Germany's military and infrastructure, has been a point of contention. His plans to loosen the constitutional borrowing limit have sparked internal dissent, particularly among the more conservative wing of his CDU/CSU grouping. The failure also casts doubt on the unity and strength of the incoming government. If Merz does not secure a majority in subsequent votes within 14 days, the threshold will be reduced to a simple plurality, or the president may nominate another candidate or dissolve parliament. Until a new chancellor is confirmed, outgoing Chancellor Olaf Scholz remains in a caretaker role. The political instability resonates across Europe, with Germany's role as an anchor of stability and a pro-European powerhouse now in question. A second vote is expected later this week. Observers warn that Merz’s credibility and authority may be undermined before even assuming office. The loss is a significant setback for his plans to revitalise the stagnant German economy and strengthen European ties....