Dusseldorf. After the CDU's poor performance in the state elections in Saxony-Anhalt and Mecklenburg-Western Pomerania as well as in the election for the Berlin House of Representatives, reports and voices about a possible exit for Friedrich Merz as Chancellor increased at the end of September. The corresponding bet on whether Merz will leave the position of chancellor by the end of the year was also very popular on the Polymarket prediction market platform - this is shown by an analysis by Handelsblatt.
A reconstruction based on the hourly price data of the yes contracts over the course of the month shows how strongly a possible resignation scenario of Merz as Chancellor was in the air. Five days before the elections in Mecklenburg-Western Pomerania and Berlin, bets against the Chancellor peaked shortly after 9 p.m. on September 15th.
The evening before, Table Media had reported on the Chancellor's plans to ask the CDU Presidium an indirect vote of confidence in the evening on election Sunday. As a result, the odds against Merz rose from the slightly increased level of 17.5 percent after the state elections in Saxony-Anhalt to more than 24 percent during the evening of September 14th.
The party headquarters denied the rumors the following day, but speculation continued - including on Polymarket. When the Chancellor surprisingly canceled his trip to the UN general debate in New York a few hours later on the grounds that his presence was necessary in Berlin, bets against Merz reached their all-time high.
The platform also responded to the increased interest and opened two more markets on the same evening, each betting on the Chancellor ending by the end of September and the end of October respectively. While a large part of the bets in the market were concentrated at the end of the year with a trading volume of more than two million dollars, the September market was comparatively large with a volume of almost 400,000 dollars despite being short-lived of just a few weeks.
In September, there were a total of more than 2,800 transactions on the main market, many new accounts were added, and the monthly trading volume grew to more than half a million dollars - a fifteen-fold increase compared to the previous months May to July. At the end of September, $2.2 million had been traded on the main market. The bets are processed fully automatically using a cryptocurrency linked to the US dollar.
Fewer and fewer people now seem to believe that the Chancellor will resign. In addition to a statement by the eight CDU heads of government who collectively pledged their support to the Chancellor as a result of the speculation on September 16th, a second circumstance may also have contributed to the decline in ratings: After none of the botched state elections, possible candidates such as Hendrik Wüst or Markus Söder positioned themselves as serious alternatives to the Chancellor.
In any case, the odds of the Chancellor leaving early at the end of the year are currently - as was last in July - around twelve percent. The probability is determined by the market prices for the yes and no contracts for the event. Betting on an end to Friedrich Merz as chancellor this year currently costs around twelve cents, while bets on the other hand cost 90 cents. The market for these questions would be dissolved as soon as Merz announces his departure, leaves office or the bet expiration date is reached. Each correctly placed bet would be paid one dollar per stake.
