I don't know enough about German domestic politics to understand the full impact, though my memory is that Merz is considered to be more-economically-liberal than Söder.
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Söder serves Bavaria first, as does his party CSU. Appointing CSU folks to federal chancellor candidacy for CDU/CSU is never smart, unless they won enough charisma and credibility federally.
Both Merz and Söder are opportunistic racists and classists, but in general they respect the rule of law aesthetically. Söder is the slightly bigger opportunistic climate denialist and doesn't fear clientelist interventionism. Merz is found near BlackRock and company. Both get off on 60 percent debt to GDP limit.
Suburban home-, shop-, land and car owners are kind of their electorate.
The only benefit of Merz is, that he's an old geezer who is nearing the ripe age of 70, with a bit of luck, Mother Nature will rid us of him before his term ends.
Yes, please no 16 years of CDU again 😭
Demographics and the so-called centre-left parties are working against us here. But the CDU is also working hard to ensure that we'll have a much bigger problem than themselves, the Nazis of the AfD, within a much shorter time than 16 years.
70 means he likely has 10 good years (or 2.5 terms) left...
One can always hope, and the probability of nature taking its course grows with increasing age.
The more interesting canidates would have been Günther or Wüst, both of them are currently ruling their states together with the green party and seem happy about what they were able to achieve there. Söder and Merz only differ a bit on how much they love bavaria.
The Greens are not doing too well in polls and Merz is clearly on an AfD appeasement course to make way for a possible right-wing coalition (or at least keep it as an option in coalition negotiations to minimize concessions to the SPD or the Greens).
I just wanted to say that the differences between Söder and Merz arent that big compared to other people that once were in the talks