Polling stations are open in Germany.

It's the first national election in Europe's largest economy since the region's debt crisis erupted four years ago.

Voters are expected to hand Chancellor Angela Merkel a third term.

But it's set to be a close race.

Merkel's current coalition partners the FDP have seen their support slip.

So her Christian Democrats may be forced into a grand coalition with the opposition Social Democrats.

SOUNDBITE: Nadja Orlowski, German voter, saying (German):

"I'm for a grand coalition."

SOUNDBITE: Unnamed German voter, saying (German):

"I think it will be a tight race and so it's even more important that everyone votes."

The SPD's Chancellor candidate Peer Steinbrueck cast his vote in Bonn.

He's previously served as Finance Minister under Merkel, but has said he won't take a ministerial post in her government again.

SOUNDBITE: Peer Steinbrueck, SPD Chancellor candidate, saying (German):

"The campaigning was really good fun, the SPD has gained support over the last four weeks and I'm glad about this. There was a clear drive. Of course you'll understand that I'm hoping to see this reflected in the results. Today's the day when the voters decide, there's no more speculation."

The vote is being closely watched by Germany's European partners.

Some hope a grand coalition with the SPD could lead Merkel to soften her approach towards struggling southern euro zone members like Greece.

The wild card in the election is the new anti-euro party Alternative for Germany.

If the AfD manages to get above 5% of the vote, it will get seats in parliament, becoming the first new party to enter the Bundestag since 1990.

The first exit polls were due to be published at 1600gmt.

62 million Germans are eligible to vote.

In the run-up to the election, a third of voters said they were undecided.

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