Both parties' top officials stated that they hope to lead Germany’s next government and see their candidates succeed Merkel. Merkel has been in power since 2005.
Based on exit polls, early counting and projections from ARD public TV, voters support the Social Democrats at 25%. Merkel's Union bloc under Armin Laschet (the governor of Germany's largest state) was at 24.5%.
Separate projections for ZDF public TV showed the Social Democrats ahead 25.7% to 24.6%. Both placed the Greens, an environmentalist group, in third place with around 14% support.
These results would be disastrous for the Union bloc post-World War II Germany.
Although the electoral system is known for producing coalition governments, post-war Germany has never seen a party win less than 31% of the vote. This was in contrast to the 1949 victory by the Union. This was also the worst result for the center-right bloc to date.
The predictions suggest that forming the next coalition government to govern Europe's largest economy will be a long and complex process. The party that finishes first in Germany is the best-placed but not guaranteed to be the next chancellor. Merkel will continue to serve as the caretaker leader of the party until they form a new coalition and a new government.
Sunday's projections also showed support for the business-friendly Free Democrats as being at around 12% and the Left Party as being at 5%. The far-right Alternative for Germany party, which is not wanted by any other party, was seen to win around 11% of votes. This is slightly less than the 12.6% it received in 2017, when it first entered parliament.
Laschet, surrounded by Merkel and his top brass, said that he was not satisfied with the outcome predicted by exit polls. The Union bloc won 32.9% of votes four years ago.
He stated that the result places Germany, the Union and all democratic parties before major challenges. We will do all we can to form a government in Germany under the Union's leadership because Germany needs a coalition that modernizes its country for the future.
Laschet's most likely route to power would be a coalition with Greens and Free Democrats.
After polling just 20.5% in 2017, and falling well below it in recent years, the Social Democrats celebrated a return. Lars Klingbeil, their general secretary, stated that "with this, it is possible to form a coalition." However, he wouldn't specify which coalition partners would be approached.
If the results are good, Social Democrat Scholz might also form a coalition of the Greens and Free Democrats. The Greens tend to favor Scholz's party, while the Free Democrats lean towards Laschet's.
Scholz declared the result a "great victory."
He told Berliner cheering supporters, "Now we will await the final election result. But then we'll get to work."
Scholz's popularity, after the long slump in their polls, and his rivals' rocky campaigns have helped to boost the Social Democrats. Annalena Baerbock was the Greens' first candidate for chancellor. Laschet, North Rhine-Westphalia's governor, also had early gaffes. This made it difficult for his party to rally its traditional base.
Although their support for the Greens increased substantially, they still hoped for more.
Michael Kellner, general secretary of the Greens, said that while we had gained a lot, it was difficult for him to enjoy it. While he acknowledged that his party prefers to work alongside the Social Democrats, he said that "we are open to speaking with all democratic parties to determine what's possible."
Christian Lindner, leader of the Free Democrats, stated that "the likelihood we can implement our programme is higher" in a alliance with the Union bloc. However, he didn't rule out other alliances.
Another possibility for governing is a repeat of Germany's outgoing "grand alliance" of Germany’s traditional big parties, Union bloc and Social Democrats. This would take place under Scholz or Laschet. After forming an often-tense alliance for 12 years of Merkel's tenure at power, neither one of the rivals will likely be interested in that.
The new Bundestag was elected by 60.4 million eligible voters in the European Union nation with 83 million inhabitants. This lower house of the parliament will elect the next head.
Merkel, who won plaudits for leading Germany through many major crises, will not be an easy leader. Her successor will be responsible for overseeing the country's recovery after the coronavirus-pandemic. Germany has fared reasonably well due to large rescue efforts.
Laschet insists that tax increases should not be made as Germany pulls away from the pandemic. Baerbock and Scholz favor tax increases for the wealthiest Germans and a rise in the minimum wage.
The leading parties in Germany have vastly different proposals to combat climate change. Laschet's Union bloc places its hopes on technological solutions, a market-driven approach, and the Greens want to increase carbon prices and eliminate coal use sooner than expected. Scholz stressed the importance of protecting jobs as Germany transitions towards greener energy.
Although foreign policy was not a prominent theme in the campaign the Greens support a more aggressive stance towards Russia and China.
Two regional elections were held on Sunday as well. Berlin could get its first Green mayor. This post has been held by the Social Democrats for over two decades. The Social Democrats are set to win the state of Mecklenburg Western-Pomerania in the northeastern region.