Merkel wins resounding victory in German election
German Chancellor Angela Merkel's party performed better than expected in Sunday's elections, almost certainly guaranteeing a third term for her.
But conflicting projections put her just short of an absolute majority and one of her key coalition partners faced a drubbing that would leave it out of the parliament.
The ruling CDU/CSU parties won 41.5 percent of the vote, according to an exit poll by ZDF.
(Read more: Merkel sweeps in: How will markets react?)
The government however would be without its previous coalition partner, the Free Democrats (FDP) who won just 4.8 percent of the vote, according to the ZDF exit poll, less than the 5 percent required to gain seats in parliament.
The opposition, left-of-center SPD won 25.7 percent of the vote, according to the same exit poll.
(Watch: How Germany's election works)
While it was a stunning victory for Merkel, the election results heightened uncertainty and raised the prospects of a grand coalition between Merkel's center-right group and either the Greens or the SPD.
Speaking to her party faithful after the vote, Merkel thanked voters for their trust.
"I want to thank people who governed with me, (these) were not easy years," she said.
But she acknowledged that it was too early to discuss coalition plans.
Meanwhile, the euro-skeptic AfD party fell short of the 5 percent needed to enter parliament, according to ZDF.
"We are happy, we are confident," Peter Altmaier, the country's environment minister and a member of the ruling CDU said in an interview on CNN.
He added that it was a clear mandate for the government of Angela Merkel.
The Greens won 8.4 percent of the vote, according to the ZDF exit poll, and the left-wing Die Linke have 8.6 percent.
The exit poll is no guarantee of the final result however. Germany's political class will still be on tenterhooks ahead of the official results, later on Sunday evening.
Follow us on Twitter: @CNBCWorld