The session of Germany’s Bundestag started in a festive mood with greetings for dignitaries there to witness a peaceful handover of power. A little over an hour later, havoc ensued that will leave a lasting mark on the start of Friedrich Merz’s term as chancellor.

In the first round of voting, 18 parliamentarians from the planned governing coalition of Merz’s conservative bloc and the center-left Social Democrats broke rank in a secret ballot on Tuesday morning. The result fell short of the required absolute majority by six votes and pitched Germany into uncharted territory.

After hours of emergency talks and tension behind the scenes, Merz secured the absolute majority needed in a second round later, sparking a round of relieved applause and a congratulatory handshake from Olaf Scholz, the Social Democrat Merz is succeeding.

Despite the expected outcome, the chaotic process will leave scars on the new chancellor and raises questions over the durability of Germany’s government.

The failed first-round vote underscores the country’s increasing volatility, which was previously highlighted by the collapse of Scholz’s three-party alliance after months of bickering. Merz was supposed to have it easier by reviving the so-called Grand Coalition, which backed three of Angela Merkel’s four terms.

Although European partners and investors have high expectations for Merz — a former Blackrock Inc. official — the rise of the far-right Alternative for Germany, or AfD, has left the head of the Christian Democrats with a thin majority. His lack of popularity and his divisive history, in turn, make him vulnerable to dissenters.

“It was supposed to be the start of a new beginning, but it turned out to be a day of big frustration,” said Carsten Brzeski, global head of macro research at ING, and a longtime watcher of German politics. “The hope that the designated next German government will be able to push ahead quickly with investments and reforms has been shattered.”

The turmoil hits the country at a delicate moment. The economy is stagnating after two years of recession, as widening inequality stokes social tensions and increases pressure to stem irregular migration. Donald Trump’s trade wars add to headwinds facing German industry, especially for Volkswagen AG and other automakers, which are already struggling to compete with Chinese rivals.

Merz’s shock setback marked the first time since the end of World War II that a German chancellor candidate had failed in the initial round of parliamentary voting — usually little more than a formality. While the identities and motivations of the objectors — which fell to just three in the second round — remain a mystery, the warning signal shows Merz will need to tread carefully going forward.

“After the bumpy start, it is now all the more important to quickly demonstrate reliability and the will to shape the future,” said Peter Adrian, president of the DIHK business lobby.

Shortly after 10 a.m. in Berlin, the initial result made the rounds in hushed murmurs among participants moments before Bundestag President Julia Klöckner made the announcement. Merkel quickly left the gallery, along with Merz’s wife and children, while Klöckner wandered around the Reichstag struggling to find the meeting room where caucus leaders were waiting for her.

Scholz, who received military honors on Monday evening as part of Germany’s ceremonial change of power, looked visibly shocked and walked through the plenum shaking his head in evident consternation. By contrast, AfD co-leader Alice Weidel laughed out loud and threw her arms around a party colleague shortly after the result was announced.

After an ashen-faced Merz left the chamber, he met with Lars Klingbeil — the Social Democrat who is now finance minister and vice chancellor. Both sides argued that their respective parliamentary groups were not to blame for the debacle.

The CDU said that Merz received a standing ovation from its caucus members. In a closed-door meeting, Klingbeil told his counterpart that he didn’t have any indication that the SPD weren’t fully behind Merz.

The tense discussion was a marked contrast to Monday, when the two signed the 144-page coalition agreement at the Gasometer, an industrial-era landmark in Berlin. Flanked by party colleagues, Merz and Klingbeil entered the venue smiling and shaking hands.

What led to the turnaround from the first to the second round is unclear — as both were secret — but pressure to end the uncertainty was enormous. And the only real winner from the turmoil is likely the AfD, which gloated over the chaos.

“Never before has a chancellor been as embattled at the beginning of his term as Friedrich Merz,” Beatrix von Storch, a deputy leader of the AfD parliamentary group, said in a post on social media. “It wasn’t the opposition that nearly knocked him out, it was his own people. They’re making Germany a laughingstock.”

It’s not the first time Merz has overestimated his authority. In late January, he sought to undermine rival centrist parties, including the Social Democrats, by forcing through a migration crackdown with the support of the AfD, but his gambit went awry after a handful of conservative politicians balked. That could have contributed to some lawmakers wanting to send a signal.

The corporate lawyer, who left politics for over a decade after Merkel thwarted his path, is also known for antagonistic statements, including accusing Ukrainian war refugees of “welfare tourism.” Conservative allies were also frustrated with his post-election u-turn on debt spending and concerns he was giving too many concessions to the Social Democrats to secure a coalition deal.

Merz did succeed in winning over the SPD and the Greens after the Feb. 23 election to pass constitutional changes to unlock hundreds of billions of euros of borrowing for defense and infrastructure spending.

The likely fiscal stimulus has made investors optimistic about Germany’s prospects. Those still need to be implemented, but now even under more scrutiny.

“It’s an unfortunate start, but it was also in the air,” said Veronika Grimm, a member of the government’s panel of independent economic advisers. “There are no simple signs of confidence right now; solutions are needed.”

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—With assistance from Zoe Schneeweiss, Iain Rogers and Greg Ritchie.

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