BERLIN — The center-left Social Democratic Party (SPD) clinched a narrow victory in Germany's historic federal elections on Sunday, just four years after suffering its worst loss since World War II.

Why it matters: It's a stunning political comeback for the SPD, paving the way for its chancellor candidate Olaf Scholz to form a new governing coalition and lead Europe's largest economy into the post-Merkel era.

State of play: The SPD won 25.9% of the vote and Merkel's CDU bloc had 24.1% following the elections, according to the preliminary official results on Monday morning.

What they're saying: Scholz said on ARD public television that he hoped to form a coalition with the Greens and Free Democrats, adding his party would "do everything we can to ensure we're done by Christmas."

The big picture: Merkel's retirement after 16 years as chancellor — the first time in the history of the Federal Republic that an incumbent did not run — left a massive vacuum at the heart of German politics, which have long been known for moderation and political stability.

• The three candidates to succeed Merkel were all relatively unpopular, and polls leading up to election day reflected a wide-open race between the SPD and Merkel's CDU, which has been in power since 2005.
• The complex system of proportional representation by which voters elect members of the German Bundestag means large parties must rely on the support of smaller ones in order to form a majority government.
• Coalition negotiations could take months, but the likeliest scenario is that either the SPD or CDU join with the center-left Greens and pro-business Free Democrats (FDP).

How we got here: Cracks began to form in Merkel's catch-all conservative party once she stepped down as chair of the CDU in December 2018, setting off a series of leadership contests that devolved into bitter public feuds.

• The party eventually selected Armin Laschet, the head of Germany's largest state, as its leader and 2021 chancellor candidate, despite his weak approval ratings.
• Laschet's repeated flubs on the campaign trail, including his inability to name his top three policy priorities during an interview, caused the CDU's poll numbers to nosedive this spring.
• The initial beneficiaries were the climate-focused Greens, who nominated a chancellor candidate for the first time ever after years of strong polling. But a series of errors by the 40-year-old Annalena Baerbock, including a plagiarism scandal, stalled the party's momentum.

Flash forward: Biding their time amid the volatility were the Social Democrats, who emerged from their 2017 election post-mortem with a new strategy, according to top officials and campaign strategists:

• Platform: The SPD focused on traditional economic issues like pension security and a €12 minimum wage, as well as climate action and an underlying campaign theme of "respect." Top aides say Scholz chose to emphasize the importance of human dignity after studying the disaffected voters who drove the outcome of the Brexit referendum and 2016 U.S. election.
• Unity: SPD general-secretary Lars Klingbeil and vice chairman Kevin Kühnert, who come from opposite wings of the party, both told Axios that presenting a united front has been critical to their success. Klingbeil and other top officials say the party steered clear of discussing "identity politics" during the campaign.
• The candidate: The SPD selected Scholz, a boring but trusted figure who was Merkel's finance minister, months before the other parties chose their standard bearers. As it became clear that similarities to the historically popular Merkel would be a competitive advantage, the campaign closed with the simple message: Wer Scholz will, wählt SPD. "If you want Scholz, vote for the SPD."

The SPD's opening came in July, when Laschet was caught on camera laughing during a visit to site of devastating floods in western Germany that had killed hundreds of people.

• The incident was raised in nearly every conversation about Laschet that Axios had with candidates, voters and campaigners in the final days of the election, and it catapulted the SPD to the top of polls for the first time in years.
• Few CDU candidates and supporters were enthusiastic about discussing Laschet on the campaign trail, with their arguments mostly centering on the party's record under Merkel and their desire to keep leftists out of government.

Between the lines: Merkel's longevity was a testament to her ability to stave off a conservative civil war and push politics to the background of everyday German life.

Go deeper ... Special report: End of Merkel era poses big questions for Europe

Editor's note: This article has been updated with the preliminary results, further context and comment from Scholz.