The tight race in Mecklenburg-Vorpommern and Berlin state elections signals potential shifts in regional policy that could affect business climate and coalition prospects for Chancellor Merz's CDU
Executive summary: State elections are underway in Mecklenburg-Vorpommern and Berlin, with early polls indicating a tightly contested race where the CDU is not projected to secure a clear advantage. The election results will shape regional governments that control key business‑relevant policies such as renewable energy subsidies, tax incentives and labor regulations, and will influence the broader federal coalition dynamics involving Chancellor Merz's CDU.
Who is involved: CDU/CSU, SPD, AfD, Greens, FDP, Chancellor Friedrich Merz, and voters in Mecklenburg-Vorpommern and Berlin.
Likely next: Polls close at 18:00 CEST on 2026-09-18, initial exit polls are expected around 20:00 CEST, and coalition negotiations among the leading parties are likely to begin by 2026-09-20.
Polls in the two eastern German states show a close contest, with the CDU of Chancellor Friedrich Merz facing weakened prospects while the SPD, AfD, Greens and FDP vie for influence. The outcome will determine the composition of state governments that oversee regional economic policies, including energy, taxation and labor rules. A CDU setback could prompt a reconfiguration of federal coalition talks, whereas a stronger showing by opposition parties may lead to more progressive or populist policy agendas at the state level.
What's next — scenarios
Base: CDU loses plurality, SPD leads coalition (40%)
SPD‑led state governments likely to maintain or expand current renewable energy subsidies and labor protections, supporting green‑tech firms and unionized sectors.
- Exit polls show SPD ahead of CDU by >3 points in either state
- Coalition talks begin with SPD as lead party by 2026-09-20
Upside: CDU retains plurality and forms coalition with FDP (30%)
CDU‑FDP coalitions would likely pursue business‑friendly tax cuts and deregulation, boosting investor confidence in manufacturing and real estate.
- Exit polls show CDU leading SPD by >2 points in both states
- FDP joins CDU in coalition negotiations by 2026-09-20
Downside: AfD gains largest share, prompting right‑wing coalition (30%)
AfD‑influenced governments could push for stricter immigration controls and skepticism toward EU climate policies, creating uncertainty for export‑oriented and green‑investment sectors.
- Exit polls show AfD leading with >25% vote share in either state
- AfD is invited to join coalition talks by 2026-09-20
What to watch
- Official poll closing time: 18:00 CEST on 2026-09-18
- Release of first exit polls: around 20:00 CEST on 2026-09-18
- Deadline for initial coalition negotiation statements: 2026-09-20
Timeline
- — Landtagswahlen: Wahlkampffinale in MV und Berlin - Enge Rennen an der Spitze (Handelsblatt)
- — Gesundheit: Abgeordnetengruppe gegen große Umstellung bei Organspenden (Handelsblatt)
- — Fallstricke für beide Seiten: Workation-Risiken: Extra-Steuer und Betriebsstätten-Gründung (Handelsblatt)
Analysis — what this means
Likely next events
- Polls close at 18:00 CEST on 2026-09-18
- Initial exit polls expected by 20:00 CEST on 2026-09-18
- Coalition talks to commence by 2026-09-20
Sectors affected
- Renewable energy subsidies
- Automotive manufacturing incentives
- Real estate tax regulation
- SME tax relief programs
Regulatory implications
- Modifications to SME tax relief programs
Historical parallels
- 2021 Berlin state election where CDU lost to an SPD‑led coalition
- 2016 Mecklenburg-Vorpommern election where AfD gained a significant vote share
- 2011 Baden-Württemberg election where the Greens overtook the CDU