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The Deutsche Bank Research Team is out with a detailed report, offering insights into Sunday’s German state elections.

Key Quotes:

“In Sunday’s state elections, the AfD did not manage to become the strongest party in either Brandenburg or Saxony, despite better performance than in recent polls.

In Brandenburg, the far-right party almost doubled its share of the vote to well over 20 percent compared to 2014, and almost tripled in Saxony. In both federal states, it thus moved from fourth to second place.

Both CDU and SPD suffered significant losses in both states, but altogether got away with a black eye.

While the CDU managed to defend its pole position in Saxony, SPD remains the strongest force in Brandenburg, contrary to fears in the run-up to the election. Both parties could therefore lead again the respective governments in Saxony and Brandenburg.

However, the formation of the two state governments in the coming weeks is likely to prove difficult and possibly lengthy. In Brandenburg, there is no majority for a continuation of the SPD-led coalition with the Left (which suffered painful losses in both federal states).

The same applies to the CDU-led governing coalition with the SPD in Saxony. The CDU there has repeatedly ruled out cooperation with the AfD. In both states, the Greens, who emerged stronger from the elections, could thus become ‘kingmaker’ of a three party coalition.”