Angela Merkel won a fourth term as Germany’s chancellor Sunday, but her party’s clout in parliament will be weaker. Merkel’s Christian Democratic Union will hold 200 of 709 seats in Germany’s parliament, according to the Federal Returning Officer. The Social Democratic Party (SPD) finished second and will hold 153 seats. The far-right Alternative für Deutschland finished stronger than was expected and will hold 94 seats.

Immigration and the nation’s handling of Europe’s refugee crisis were among the key issues in the campaign, even as the number of asylum seekers fell dramatically in 2016 and 2017 after peaking at nearly 890,000 in 2015. The anti-immigrant, anti-EU AfD capitalized on the issue, finishing third after having no representation in parliament at all before this election. Merkel’s CDU must now forge a governing coalition with smaller parties after the SPD said it would move into opposition. The CDU and other German parties have said they will not partner with AfD.

BAL Analysis: The impacts the election will have on business immigration, or even immigration more broadly, are difficult to tell at this point. The CDU supports the current policy of limiting skilled migration from outside the EU to those who have firm job offers in Germany. The SPD favors a Canadian-style program where migrants would be awarded points based on skills, education and other job-market criteria (a trial of this type of program is underway in the state of Baden-Württemberg). With SPD announcing that it will move into the opposition, CDU must work with at least two other political parties to form a coalition. How that process will affect immigration policies remains to be seen.

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