Germany's mainstream conservatives won the country's national election, while a far-right party surged to become the nation’s second-largest party, according to provisional results following Sunday’s election.

The leader of the far-right Alternative for Germany (AfD), the second largest party in parliament after Sunday's election, said Germany's likely next chancellor would be held hostage by left-wing parties that would seek to loosen tough fiscal rules.

Germany's conservatives won the national election on Sunday, while the far-right Alternative for Germany came in second, its best ever result.

Germany’s political system is set up to exclude extremists. Yet the country is waking up to a new political reality that has lurched to the right with the once outcast Alternative for Germany (AfD) party now firmly established in German politics.

Friedrich Merz, likely Germany's next chancellor, said he was under "no illusions" about the White House's impact on campaigning as the far-right AfD surged to a historic high.

Germany faces its second change of leader in less than four years after the head of the center-right opposition won Sunday’s election.

Germany's conservative CDU/CSU bloc won most votes in Sunday's national election and could form a government with the Social Democrats (SPD), allaying market fears that Europe's top economy can only be ruled by another three-way coalition.