“It is a bitter election result for the Social Democratic Party. It is also an election defeat, [and] I think that needs to be said once clearly, from the start, given a result like this,” Scholz said at the party’s headquarters Sunday night after the SPD’s drubbing in the ballot.

“This time the election result is bad and therefore I also have responsibility for this election result,” he added.

“It’s going to be complicated” to form a new coalition, Brzeski told CNBC’s Annette Weisbach in Berlin on Monday.

“We only have one option and that is another grand coalition. The problem will be that the SPD is extremely hurt – the worst result ever – so they will be in a kind of existential crisis.”

“We will get a bit of cyclical support, we’ll get some tax cuts, we’ll get probably also some investment programs. But the big elephant in the room remains will we get changes to the debt brake? And I think in the current constellation of the next parliament, this will not be possible,” he warned.

“From our perspective, it’s really time to act, and after yesterday’s election, we wish that the new German government will form together quickly and then enter into decisive, immediate action and also a long, clear, long-term vision and a roadmap to really bring Europe’s economy back on track,” he told CNBC’s Carolin Roth on Monday.

“I think Germany’s manufacturing sector requires some urgent action in terms of taxes, in terms of energy costs, and also in terms of flexibility of the labor market. There’s three big, big things that are important for everyone in the manufacturing sector. For the automotive industry, of course, regulation is a top issue.”

“I think it’s very good news for Germany. I am actually quite close to Friedrich Merz,” Emerson, former U.S. ambassador to Germany, told CNBC Monday, reacting to Friedrich Merz’s comments on Sunday night that it was “absolute priority” to “strengthen Europe as quickly as possible so that we can achieve real independence from the U.S. step by step”.

“I think he is dead serious about where he talked about [Sunday night], in effect, declaring independence from the United States and, I guess [U.S. Vice President] JD Vance and Donald Trump can’t complain,” Emerson, told CNBC’s Steve Sedgwick.

“Merz is a free trade guy … so I when I hear him talking about independence, I hear that as much more as ‘we need to get to a point where we can stand alone, that we Europe, can defend ourselves and do more in terms of the spending and building up of the military capabilities.’ I hear that more as a national security issue than an economic issue. Merz also has a second job. That job is to help revitalize Germany’s faltering economy.”

“What happens with the U.S., tariff-wise, or trade-wise, is extremely important” for Germany, according to Herrero, a senior fellow at economic think-tank Bruegel. “I think Europe is waking up, and Merz is the best example of this,” she told CNBC Monday.

“They [European leaders] are realizing that they need to get closer together. And that is the silver lining that could make Europe stronger, that could make Germany stronger, that could force Germany, for once, to really think of a EU level military proposal, which would, however, mean that Germany would need to leave the debt break.”