Chancellor Angela Merkel's conservative alliance won the German election, but a steep drop in its support and an anti-immigrant party's surge signaled political turbulence ahead for Europe's largest economy.
Her center-right bloc's victory on Sunday, projected at about 33% to 21%, over the center-left Social Democrats means that Ms. Merkel is virtually assured of a fourth term as chancellor.
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But the election result signaled a sudden turn for a political system whose relative stability has underpinned the European Union in recent years as it lurched from crisis to crisis. The center grew weaker and an unpredictable new force rose on the right, delivering a historic setback for the country's mainstream. Polls and interviews showed that Ms. Merkel's decision to allow hundreds of thousands of refugees and migrants to enter Germany in 2015 loomed over the election.
Ms. Merkel's Christian Democrats and their Bavarian sister party saw their worst result since 1949, losing around a fifth of the 41.5% support they garnered just four years ago. The Social Democrats suffered their worst election since World War II. The establishment's troubles came despite a healthy economy providing nearly full employment and pre-election approval ratings for Ms. Merkel of above 60%.
The nationalist Alternative for Germany, known as the AfD and founded less than five years ago, vaulted over the 5% hurdle for seats in Parliament with some 13% of the vote. It will become the first party with positions well to the right of Ms. Merkel's center-right bloc to sit in the national legislature in more than 50 years. The party wants to weaken European integration, describes Germany's Muslim minority as a "great danger" and says the country should reduce its focus on Holocaust remembrance.
"We will tolerate xenophobia as little as we tolerate racism, but we simply don't have it," party co-chairman Jörg Meuthen said on public television.
The AfD's success underscores the antiestablishment mood and the shrinking of the political center seen in recent years across the West.
"A great new challenge lies before us: the entry of the AfD into the German Bundestag," Ms. Merkel told supporters after saying she was slightly disappointed with the result. "We want to win back AfD voters by solving problems, by taking in their concerns and in part their fears, and especially through good policy-making."
Ms. Merkel faces another challenge in forming a government. Lacking a majority in Parliament, she will need to build a governing coalition. The Social Democrats, who served as her junior governing partner for the past four years, said after the results came in on Sunday night that they would refuse to govern in Ms. Merkel's shadow once again.
In part because of the AfD's success, Ms. Merkel only has one other option: creating a three-way coalition with the pro-business Free Democrats, who received about 11%, and the environmentalist Greens, who won about 9%.
The coalition-building process could drag on for weeks or even into the winter, as Ms. Merkel and other party leaders hammer out the new government's position on EU integration, immigration and other issues in their coalition talks.
Europe will be eagerly awaiting the result as French President Emmanuel Macron prepares to seek deeper political ties among the 19 countries that use the euro and the EU grapples with how to respond to the continuing flow of African migrants crossing the Mediterranean.
The Free Democrats want more fiscal discipline in the eurozone and a tougher line on migrants, while the Greens are significantly more liberal on both issues. Squaring their divergent positions is likely to prove very challenging for Ms. Merkel if she pursues an unprecedented three-way coalition with those two parties. Her conservative Bavarian sister party, the Christian Social Union, is also likely to push back against the Greens' influence.
"We made the mistake of leaving our right flank somewhat open," Bavarian Premier Horst Seehofer said, suggesting that Ms. Merkel's move toward the center had abandoned conservative voters to the AfD.
Exit polls and interviews showed that two years after the height of the refugee crisis, voter unease with Ms. Merkel's immigration and refugee policy hung over the election. An exit poll released by ARD public television found that 90% of voters said rejected asylum applicants needed to be deported faster, 71% wanted a limit on the number of refugees the country will accept, and 57% said they were concerned about a rising influence of Islam.
The AfD took about as many voters from Ms. Merkel's conservatives as from left-of-center parties, an ARD analysis showed. Social Democratic leader Martin Schulz said his party didn't sufficiently show its base that they didn't need to see immigrants as a threat to their well-being.
"We were not successful, one must admit, in convincing part of the traditional electorate of our party that Germany is strong enough not to forget anyone," Mr. Schulz said.
The election concludes a singular campaign. For months leading up to the election, polls left little doubt that Ms. Merkel would cruise to another victory while Mr. Schulz struggled to gain traction in a largely contented electorate.
But in a late surge, the AfD recouped ground it lost amid party infighting this year and catapulted into third place. Some analysts put the blame on the lack of clear policy differences between Ms. Merkel and Mr. Schulz, as exemplified in a televised debate in which the disagreements between the two candidates proved relatively subtle.
"I voted for the only democratic party available," said Edgar Pudwele, a 66-year-old pensioner in Berlin who voted for the AfD. "The Greek bailout, the euro policy, Germany 's liability for other countries, Ms. Merkel's embezzlement of taxpayers' money for refugees -- all this has to stop."
--Andrea Thomas contributed to this article.
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(END) Dow Jones Newswires
September 24, 2017 20:10 ET (00:10 GMT)