As a new chapter in German politics begins on Monday following the federal election at the weekend, there's a distinct feeling of déjà vu in Berlin.

People hold signs in support of German conservative candidate for chancellor and Christian Democratic Union (CDU) party leader Friedrich Merz, during the 2025 general election, at the CDU party headquarters in Berlin,

Germany's conservative CDU/CSU bloc won most votes in Sunday's national election and could form a government with the Social Democrats (SPD), allaying market fears that Europe's top economy can only be ruled by another three-way coalition.

Germany faces its second change of leader in fewer than four years after the head of the center-right opposition, Friedrich Merz, won Sunday's election, which saw a surge for a far-right party and a stinging defeat for outgoing Chancellor Olaf Scholz.

Germany's conservative CDU leader Friedrich Merz welcomed on Monday the interest shown by British Prime Minister Keir Starmer in improving ties with Europe, adding that the two had spoken several time in the last few weeks.

Analysts say Friedrich Merz will have one shot at fending off ascending populists and an increasingly hostile U.S.