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Alternative for Germany (AfD) top candidate for the Brandenburg election Andreas Kalbitz reacts for the first exit polls for the Brandenburg state election in Werder, Germany, Sept. 1, 2019.

AXEL SCHMIDT/Reuters

The far-right Alternative for Germany party surged in that country’s eastern state elections on Sunday, falling short of first-place finishes in Brandenburg and Saxony but deepening the struggles of the country’s historical political establishment.

The party, known as AfD, earned 23.5 per cent of first-choice votes in Brandenburg, according to exit polls by broadcaster ZDF, although the incumbent centre-left Social Democratic Party came out ahead with 26.2 per cent of first-choice votes. In neighbouring Saxony, the centre-right Christian Democrats – the party of Chancellor Angela Merkel – came in first place with most polls reporting. The party earned 32.1 per cent of votes, shedding 4.9 percentage points from 2014, ahead of the AfD’s 27.5 per cent.

Gasps wafted through the Social Democrats’ election party in Potsdam Sunday evening as a television showed the AfD’s strength in early results; after governing Brandenburg since reunification, the Social Democrats were one or more percentage points behind the AfD, according to many pre-election polls. The mood soon shifted to relief as the centre-left party seized first place.

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State Leader Dietmar Woidke soon took the stage and threw a barb at the AfD’s xenophobic positions: “I’m glad that the face of Brandenburg remains a friendly face,” he said. In Dresden, incumbent Christian Democrat Leader Michael Kretschmer made a similar remark: “The friendly Saxony has won.” Despite warding off their biggest political threats, challenges remain ahead for the governing parties: Both will need to form coalitions with others to govern, although they have promised not to partner with the AfD.

While Germany’s moderate established parties were able to escape their worst-case scenarios, the weak results – and overall loss of vote share – in these formerly socialist eastern states have the potential reshape the politics of Germany, the world’s fourth-largest economy and a force of stability in a European Union rattled by Brexit’s threat.

The Christian Democrats and Social Democrats govern Germany as a coalition, with each in the midst of a leadership transition. Diminished mandates in Brandenburg and Saxony could throw the parties into disarray and trigger an early general election – one in which both the far-right AfD and fast-growing leftist Greens could become significant power brokers. Domestic instability, meanwhile, could also sideline Ms. Merkel’s foreign-policy efforts in the era of Brexit, Iran nuclear negotiations and global trade tensions.

What began as a Euroskeptic party in 2013 has become a far-right political force. The AfD transformed anger over Ms. Merkel’s 2015 promise to let a million refugees into Germany into a third-place finish in 2017’s general election. Rising to second-place finishes in Brandenburg and Saxony will give the party greater influence in the national conversation ahead of the next federal election, which is scheduled for 2021 – but could come sooner if the historic federal Christian Democrat-Social Democrat coalition unravels.

While the Social Democrats celebrated here in historic Potsdam – which is both Brandenburg’s capital and a bedroom community for the well-moneyed of neighbouring Berlin – the AfD’s rise took place in less economically well-off, more rural areas. Dwindling populations there have struggled to keep up with the prosperity of western and urban communities since reunification. The party shores up votes in large part by positioning itself as the antithesis of the establishment that allowed the east to struggle.

The AfD’s rise in the eastern elections is yet another sign of “the ongoing fragmentation of the German party system,” with the decline of the country’s historically dominant parties, said Kai Arzheimer, a professor of political science at the University of Mainz.

In particular, that means the Christian Democrats and Social Democrats. The two parties make up Germany’s governing “grand coalition,” but each is grappling with leadership struggles, especially after the AfD and Greens ate into their traditional support base in May’s European Parliament election.

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Ms. Merkel, a Christian Democrat, resigned last year as party leader, but intends to remain as Chancellor until the next general election.

Then-Social Democrat leader Andrea Nahles, meanwhile, resigned after the EU elections, prompting an existential crisis that will culminate in a leadership vote by the end of the year.

While the Christian Democrats’ lowered turnout in Saxony would likely make the party’s national wing “close ranks and soldier on,” Prof. Arzheimer said, the parties also plan to review their national coalition by the end of 2019. Frustrated Social Democrats could vote to leave, thrusting the the Christian Democrats into a minority as that party transitions its own leadership, and potentially triggering an early election.

Describing the Social Democrats as in a period of “national decline,” Prof. Arzheimer said that “many of the rank-and-file and lots of left-leaning mid-level functionaries will see major losses as the final straw, and will argue for ending the so-called grand coalition in Berlin.”

But it also could encourage the party to avoid an early election in order to shore up its base. Christian Martin, the Max Weber Visiting Chair for German and European Studies at New York University, said that as it stands, the Greens have risen enough in national politics to rise to a second-place election finish, putting them in a king-making position in a coalition, likely with the Christian Democrats – “which was unthinkable only a few years ago.”

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