Merkel party suffers first defeat by anti-immigration populists

[BERLIN] Chancellor Angela Merkel's party was beaten by the populist Alternative for Germany for the first time in a state election, showing the persistence of the backlash against her open-border refugee policy.

Ms Merkel's Christian Democrats took 19 per cent in the Baltic coast state of Mecklenburg-Western Pomerania on Sunday, while Alternative for Germany, or AfD, had about 22 per cent, according to ARD projections based on partial returns.

The Social Democrats, who have governed the eastern state since 1998, won the election with an estimated 30.3 per cent, dropping Ms Merkel's party to third place in her political homeland.

"This result is bitter for everybody in our party," CDU General Secretary Peter Tauber told reporters in Berlin. "There are people who have fears and concerns - and we didn't manage to quell these fears."

A year before national elections in which Ms Merkel may seek a fourth term, the defeat underscores the surge in public anxiety in Germany that's put the chancellor on the defensive after more than 1 million asylum seekers arrived last year.

The AfD, which blames the influx on Ms Merkel's refusal to close the borders, campaigned against immigration as well as opposing her renewable-energy strategy and arguing against sanctions on Russia.

"Merkel's catastrophic refugee policy always plays a role," AfD's co-chairwoman Frauke Petry told broadcaster ZDF.

Although not an imminent danger to Ms Merkel, who signalled Friday that she'll decide by December whether to run again for the chancellorship, the result will renew pressure within her party as members bristle at the resistance to her stance on migration.

"I'm pretty sure that she and the CDU will wake up to some headaches tomorrow," Carsten Nickel, an analyst for Teneo Intelligence in Brussels, said by phone.

"These numbers points to a broad opposition to migration rather than local issues - and that will cause extra concern." Normally a political outlier, thinly populated Mecklenburg-Western Pomerania in the formerly communist-ruled east is the latest battleground for the AfD, which was founded in 2013 as an anti-euro party and gained support in three state votes in March. The region of 1.6 million people is home to Ms Merkel's electoral district.

On election day, Ms Merkel was thousands of miles away at the Group of 20 summit in Hangzhou, China, after campaigning across the state to get out her party's vote. While she didn't immediately comment on the outcome, party officials signalled she isn't about to change course.

"Whoever votes for the AfD is casting a protest vote," said Michael Grosse-Broemer, CDU chief whip in the lower house of parliament in Berlin.

"The best response is to point out that the policy we make in Berlin isn't all bad," he said, citing a strong economy and booming employment.

While the CDU still leads in national polls, its electoral woes have been on display and public approval of Ms Merkel's policies declined to a five-year low of 45 per cent in August.

In March, the Christian Democrats lost to the Greens in the rich southwestern state of Baden-Wuerttemberg, where the AfD cut into the CDU's base.

In the eastern region of Saxony-Anhalt, Alternative for Germany won 24.2 per cent, its best state result yet. At the national level, the party is polling about 10 per cent.

BLOOMBERG