German elections, economy: what to know

The German DAX, the country's benchmark stock index, is up 13% YTD

After 16 years in power, Angela Merkel is stepping down as Germany's chancellor, paving the way for a new generation of leadership for Europe's biggest economy and a major U.S. ally and trading partner. 

German chancellor Angela Merkel salutes with a beer mug during a state election campaign in Munich, Germany, Friday, Sept. 24, 2021, two days before the General election on Sunday, Sept. 26, 2021. (AP Photo/Matthias Schrader)

The latest polls show the outgoing leader's center-right Union bloc, with Armin Laschet as its candidate for chancellor, a little behind or nearly level with the center-left Social Democrats, who have Finance Minister Olaf Scholz seeking the chancellorship.

The contenders to succeed Angela Merkel as Germany's chancellor sought to mobilize voters Friday as the election campaign neared its close, touting their credentials to lead Europe's biggest economy into a new era as it grapples with the fallout from the coronavirus pandemic and climate change.

FOX Business, in coordination with the Associated Press, took a look at the election and Germany's economy. 

The Candidates 

Olaf Scholz of the Social Democrats, Anna-Lena Baerbock of the Greens and Armin Laschet of the Christian Democrats, from right, during different election campaigns in Germany.

FILE - A combo images all taken in 2021 shows the chancellor top candidates, Olaf Scholz of the Social Democrats, Anna-Lena Baerbock of the Greens and Armin Laschet of the Christian Democrats, from right, during different election campaigns in German

The race has narrowed to three candidates hoping to win the job Merkel has held over four terms in office: Olaf Scholz of the Social Democrats, Anna-Lena Baerbock of the Greens and Armin Laschet of the Christian Democrats.

Experts say one reason why this year's German election is tighter and less predictable than usual is that the candidates are relatively unknown to most voters.

"It’s certainly not the most boring election," University of Leipzig political scientist Hendrik Traeger told the AP. "There were those in which Angela Merkel stood as the incumbent, and it was simply a question of who she would govern with."

Merkel Stumps for Armin

Armin Laschet, chairman of the German Christian Democratic Union (CDU) and the party's top candidate for the federal election, left, and German chancellor Angela Merkel attend a joint campaign appearance in Stralsund, Germany

Armin Laschet, chairman of the German Christian Democratic Union (CDU) and the party's top candidate for the federal election, left, and German chancellor Angela Merkel attend a joint campaign appearance in Stralsund, Germany, Tuesday Sept, 21, 2021.

Outgoing Chancellor Angela Merkel sought to boost struggling would-be successor Armin Laschet on Tuesday in the tight race to become Germany's next leader, telling attendees of a rally in her longtime electoral district that he will look out for jobs and security.

Merkel touted her government's record in bringing down unemployment and Germany's debt, decrying plans by Laschet's rivals to raise taxes. She also suggested there was a danger of a left-wing German government being overly generous in giving financial help to more indebted European countries.

"There is a lot at stake on Sunday," she told the crowd on a wet evening in Stralsund, in Germany's northeastern corner. "It's about whether ... we give people who want to create jobs, companies that want to contribute something to Germany's prosperity, the chance, the freedom" to do so.

The alternative, she added, is "a policy of only thinking of redistributing, but not creating" wealth.

"I know Armin Laschet, as governor of North Rhine-Westphalia, fights for every single job in his state, and he would also do that as chancellor of Germany," Merkel said.

Angela Merkel Trailblazer & U.S. Ally 

Merkel is the first woman to hold the office of chancellor after being sworn in on November 2005. 

She has been an ally of many U.S. presidents, most recently Biden, and Trump before him. 

President Joe Biden meets with German Chancellor Angela Merkel in the Oval Office of the White House

President Joe Biden meets with German Chancellor Angela Merkel in the Oval Office of the White House, Thursday, July 15, 2021, in Washington. (AP Photo/Evan Vucci) (AP Photo/Evan Vucci / AP Newsroom)

Merkel was born in Hamburg on July, 17 1954, according to her government bio.

President Donald Trump greets German Chancellor Angela Merkel outside the West Wing of the White House in Washington

President Donald Trump greets German Chancellor Angela Merkel outside the West Wing of the White House in Washington, Friday, March 17, 2017. (AP Photo/Pablo Martinez Monsivais) (AP)

GERMANY'S STOCK MARKET & ECONOMY 

The German DAX, the country's benchmark stock market, is up 13% YTD, trailing the S&P 500's 18.6% gain through Friday.  

Ticker Security Last Change Change %
DAX HORIZONS ETF TRUST I DAX GERMANY ETF 32.59 -0.15 -0.45%

Germany’s economy is facing post-COVID-19 headwinds similar to the U.S. as supply chain disruptions slow growth. This month, ifo Economic cut is the outlook for German GDP for those very reasons. 

"The strong post-pandemic recovery that was originally expected in the summer has yet to materialize," said Timo Wollmershäuser, head of forecasts at ifo. 

Economic output will grow by only 2.5% this year, but by 5.1% next year.

Germany’s economy accounts for about 3.4% of the world economy with a value of $3.8 trillion, which makes it the fourth-largest globally, according to Trading Economics. The U.S. is the world’s largest superpower, accounting for 18.5%. 

CANDIDATES FETED TESLA'S ELON MUSK 

Germany may be home to Mercedes Benz, Audi, BMW and the once-mighty Daimler, but Tesla is just as important to the country’s next chancellor. 

Ticker Security Last Change Change %
TSLA TESLA, INC. 894.00 +28.20 +3.26%

TESLA’S ELON MUSK FETED BY GERMAN CHANCELLOR HOPEFUL

Billionaire Elon Musk said he hopes to begin production at the Gruenheide facility in October as covered by FOX Business. 

Tesla had initially planned to begin manufacturing in July, but legal problems and issues with permitting led to delays.

"We’re looking forward to hopefully getting the approval to make the first cars, maybe in October if we’re fortunate," Musk told reporters

"Giga Berlin-Brandenburg county fair & factory tour on 9 October!" the SpaceX founder later tweeted, noting that while there would be priority access for Berlin and Brandenburg residents, it would be open to the general public.

Germany's center-right candidate to replace Angela Merkel as chancellor in the upcoming elections and Christian Democratic Union chairman, Armin Laschet, right, talks to Elon Musk, Tesla CEO

Germany's center-right candidate to replace Angela Merkel as chancellor in the upcoming elections and Christian Democratic Union chairman, Armin Laschet, right, talks to Elon Musk, Tesla CEO, during a visit at the construction site of the Tesla Gigaf (Patrick Pleul/dpa via AP)

The Associated Press and FOX Business' Julia Musto contributed to this report.