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In the city of Koenigs Wusterhausen, Brandenburg state, supporters of the Alternative für Deutschland (AfD) party react during an Aug. 30 election event. Voters in the state go to the polls on Sept. 1.

Michele Tantussi/Reuters

As a massive rainstorm approached the state of Brandenburg’s namesake city, Andreas Kalbitz unleashed his own rhetorical storm on the 300 or so people gathered in a public market.

Over the course of almost 30 minutes, the state leader of the far-right Alternative für Deutschland (AfD) party framed shifting social norms as attacks on traditional German life. He railed against removing the word Christmas from holiday traditions. The teaching of Turkish and Arabic in school, he said, took integration too far. He even characterized large Muslim prayer gatherings not as a religious ritual but as a demonstration of political power. He was met with nods, claps, even laughs.

At the rally, Mr. Kalbitz laid bare his feelings about Germany’s shifting demographics: “The only kind of airport noise I like is the one planes make when they fly so-called ‘refugees’ back home.” (Noise levels at airports are a topic of regular debate in Germany.)

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The AfD's Andreas Kalbitz speaks during an election campaign of AfD youth organisation Young Alternative for Germany, in Cottbus, Germany, on Aug. 4, 2019.

Hannibal Hanschke/Reuters

Riding a wave of dissatisfaction after Chancellor Angela Merkel’s 2015 decision to accept a million refugees into Germany – largely from the Middle East and Africa, many of them Muslim – the AfD is now a serious political force and a leading contender in advance polls ahead of several state elections on Sept. 1.

The elections come at a precarious moment for Germany – even more so for former East German states such as Brandenburg and Saxony, which have struggled to catch up with the economic and population growth of western states in the three decades since the Berlin Wall fell.

Sunday’s elections will have far-reaching implications, threatening to widen the regional disparities and damage Europe’s largest economy, shaking the foundations of Germany’s political future.

After a 2017 federal election that saw the centre-right Christian Democrats and centre-left Social Democrats draw historically low vote shares, Ms. Merkel is ending her decade and a half as Chancellor with diminished authority. The results on Sept. 1 in Brandenburg and Saxony could send one or both national parties into a crisis, potentially triggering an early federal election.

And just days before Mr. Kalbitz’s rally, Germany revealed GDP numbers showing a country on the brink of recession, prompting Dieter Kempf, the president of the Federation of German Industries, to warn that the AfD’s rise could deal a further blow to the economy.

“Achievements of the AfD harm the image of our country,” Mr. Kempf told the Funke Media Group.

“The attractiveness of a location suffers from extremist parties. There is a threat of downturn and structural weakness. … The emphasis on nationalism would cause enormous economic and political damage.”

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'Take a chance on more democracy!' reads an AfD poster in Treuenbrietzen showing former German chancellor and Social Democrat Willy Brandt, who used that phrase in a famous 1969 speech to the legislature.

Sean Gallup/Getty Images

In Dresden, an installation of thousands of shoes honours migrants who died in their crossings to Europe. The installation was part of the Unteilbar ("indivisible") march against racism, whose organizers decried nationalist politics and class inequality ahead of the state elections.

Gabriel Kuchta/Getty Images

In an interview with The Globe and Mail as rain poured down after his speech, Mr. Kalbitz tempered his comments on immigration, trying to avoid connecting his party’s immigration stance with any particular race or place of origin. “We need immigration from specialists, but not this kind of mass immigration that we have at the moment of people who don’t come here to work,” he said.

Despite the subject matter, the AfD rally was framed as a family-friendly fair, complete with a bouncy castle. Across the street and separated by dozens of police officers, several hundred protesters gathered with a bouncy castle of their own, surrounded by signs that read, “Anti-Fascist Area” and, in German, “Honk Against Nazis.”

Among the protesters was 21-year-old Hannah Bühl, who was frustrated that the AfD’s legitimization in politics had given rise to more open hate speech.

“People say, ‘Oh yeah, it’s a democratic party and we should hear their voices,’” she said. “But it’s not okay what they say. … It’s discriminating, it’s oppressing people.”

The AfD has transformed in just six years from a loose band of conservative euroskeptics to a populist anti-refugee party with elected officials in both the German and European Union parliaments, with Mr. Kalbitz considered a stalwart of its furthest-right wing. Recent reports in German media, such as Die Welt, have established historical connections to far-right extremist groups and statements.

Asked about these reports, Mr. Kalbitz told The Globe, “There’s no extreme-right biography,” but “there may be” some previous contact with extremists. He insisted there was a media campaign against him and that he’d moved past that part of his life: “I’m of strong belief in the circumstance that I’ve also made personal developments.”

A poll this month by Forsa for Brandenburg newspaper Märkische Allgemeine found the AfD leading in the state with 21 per cent of vote intention, followed by Ms. Merkel’s Christian Democrats at 18 per cent. The ruling Social Democrats, meanwhile, sit at at 17 per cent – threatening the legacy of the party that has governed the state since reunification.

Poll in Brandenburg:

Vote intention by party

Survey date Aug. 9, 2019

Alernative fur

Deutschland

21%

Christian Democratic

Union

18

Social Democratic

Party

17

The Greens

16

The Left

14

Free Democratic

Party

5

9

Other

THE GLOBE AND MAIL, SOURCE: FORSA FOR

MÄRKISCHE ALLGEMEINE

Poll in Brandenburg: Vote intention by party

Survey date Aug. 9, 2019

Alernative fur

Deutschland

21%

Christian Democratic

Union

18

Social Democratic

Party

17

The Greens

16

The Left

14

Free Democratic

Party

5

9

Other

THE GLOBE AND MAIL, SOURCE: FORSA FOR MÄRKISCHE ALLGEMEINE

Poll in Brandenburg: Vote intention by party

Survey date Aug. 9, 2019

Alernative fur Deutschland

21%

Christian Democratic Union

18

Social Democratic Party

17

The Greens

16

The Left

14

Free Democratic Party

5

9

Other

THE GLOBE AND MAIL, SOURCE: FORSA FOR MÄRKISCHE ALLGEMEINE

Next door in Saxony, meanwhile, a Civey poll for Spiegel Online found the AfD at almost 25 per cent, just behind the governing Christian Democrats at 28 per cent. (While the leftist Green Party has risen to similar prominence nationally, an August report by the German Institute for Economic Research found their support was lowest in the east.)

Poll in Saxony: Vote intention by party

Survey period July 2, 2019 - Aug. 20, 2019

Christian Democratic

Union

28.0%

Alernative fur

Deutschland

25.2

The Left

15.0

11.4

The Greens

Social Democratic

Party

8.5

Free Democratic

Party

5.5

6.4

Other

THE GLOBE AND MAIL, SOURCE: CIVEY FOR SPIEGEL ONLINE

Poll in Saxony: Vote intention by party

Survey period July 2, 2019 - Aug. 20, 2019

Christian Democratic

Union

28.0%

Alernative fur

Deutschland

25.2

The Left

15.0

11.4

The Greens

Social Democratic

Party

8.5

Free Democratic

Party

5.5

6.4

Other

THE GLOBE AND MAIL, SOURCE: CIVEY FOR SPIEGEL ONLINE

Poll in Saxony: Vote intention by party

Survey period July 2, 2019 - Aug. 20, 2019

Christian Democratic Union

28.0%

Alernative fur Deutschland

25.2

The Left

15.0

11.4

The Greens

8.5

Social Democratic Party

5.5

Free Democratic Party

6.4

Other

THE GLOBE AND MAIL, SOURCE: CIVEY FOR SPIEGEL ONLINE

The AfD’s strength in advance polls would not be enough to govern Brandenburg and Saxony alone. But its newfound popularity, along with that of the Greens on the left, has fractured traditional voting lines and is expected to force unusual and potentially weak coalition governments among other parties in those states.

“I very strongly doubt the AfD will ever form a government,” said political economist Marcel Fratzscher, president of the German Institute for Economic Research in Berlin. “All parties have basically declared they’ll never form a coalition with the AfD.” But, he continued, “polarization could continue if the economic, structural and demographic differences persist.”

As much as the past three decades have improved life for Germans in the east, the ghost of the former German Democratic Republic still haunts the region.

Mr. Kalbitz chalks up his party’s rising popularity in the formerly socialist sector of Germany to the region being left behind after reunification in 1990. “Nothing’s happened,” he said. Citizens “are motivated for change.”

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In Chemnitz last Aug. 27, right-wing demonstrators march past a sculpture of Karl Marx. The rally was prompted by the death of a German national who died in hospital of what police called a 'dispute between several people of different nationalities.'

ODD ANDERSEN/AFP/Getty Images

A week after the rally, people in Chemnitz held a rave in front of the Marx statue to say no to the far right.

John MACDOUGALL/AFP/Getty Images

Since Germany began stitching itself back together, eastern states have struggled to keep up with the country as a whole as young people and skilled workers leave for regions that have more people, jobs and tolerance. Brandenburg’s population has fallen almost 3 per cent since 1990, to 2.5 million, and Saxony, with a current population of 4.1 million, has lost 14 per cent of its people, according to the national statistics agency.

State populations as a percentage

of Germany’s total population, 2018

Former East-

West divide

Schleswig-

Holstein

Mecklenburg-

Western

Pomerania

Berlin

Hamburg

Bremen

Brandenburg

Lower

Saxony

Saxony-

Anhalt

North Rhine-

Westphalia

Saxony

Thuringia

Hesse

Rhineland-

Palatinate

LEGEND

5 % or less

5 to 10%

Bavaria

Saarland

10 to 15%

Baden-

Wurttemberg

15 to 20%

Over 20%

THE GLOBE AND MAIL, SOURCE: FEDERAL

STATISTICAL OFFICE OF GERMANY

State populations as a percentage

of Germany’s total population, 2018

Former East-

West divide

Schleswig-

Holstein

Mecklenburg-

Western

Pomerania

Berlin

Hamburg

Bremen

Brandenburg

Lower

Saxony

Saxony-

Anhalt

North Rhine-

Westphalia

Saxony

Thuringia

Hesse

Rhineland-

Palatinate

LEGEND

5 % or less

5 to 10%

Bavaria

Saarland

Baden-

Wurttemberg

10 to 15%

15 to 20%

Over 20%

THE GLOBE AND MAIL, SOURCE: FEDERAL

STATISTICAL OFFICE OF GERMANY

State populations as a percentage of Germany’s total population, 2018

Former East-

West divide

Schleswig-

Holstein

Mecklenburg-

Western

Pomerania

Berlin

Hamburg

Bremen

Brandenburg

Lower

Saxony

Saxony-

Anhalt

North Rhine-

Westphalia

Saxony

Thuringia

Hesse

Rhineland-

Palatinate

LEGEND

5 % or less

5 to 10%

Bavaria

Saarland

10 to 15%

Baden-

Wurttemberg

15 to 20%

Over 20%

THE GLOBE AND MAIL, SOURCE: FEDERAL STATISTICAL OFFICE OF GERMANY

A 2015 report from Bertelsmann Stiftung found that between that year and 2030, Brandenburg’s median age will rise by almost four years, to 53, while Saxony’s will rise two, to 50.

And while productivity has increased across the east, its gross domestic product per capita hasn’t come close to matching the west’s since reunification – according to a federal report, it was still just 73 per cent of the west’s in 2017.

Eastern Germany's GDP per capita

relative to western Germany's

Per cent

80%

75

70

65

60

55

50

45

40

2013

1993

2001

2005

1997

2009

2017

THE GLOBE AND MAIL, SOURCE:

GOVERNMENT OF GERMANY

Eastern Germany's GDP per capita

relative to western Germany's

Per cent

80%

75

70

65

60

55

50

45

40

2013

1993

2001

2005

1997

2009

2017

THE GLOBE AND MAIL, SOURCE: GOVERNMENT OF GERMANY

Eastern Germany's GDP per capita relative to western Germany's

Per cent

80%

75

70

65

60

55

50

45

40

2013

1993

2001

2005

1997

2009

2017

THE GLOBE AND MAIL, SOURCE: GOVERNMENT OF GERMANY

These struggles and the AfD’s nationalist policies are intertwined. Four decades in the Eastern Bloc left that part of Germany deeply homogeneous, Dr. Fratzscher said, fuelling xenophobia even after the Wall fell. Then open-minded young people flocked to more diverse cities and regions, shrinking the talent pool and making the region less attractive for business investment.

All this has left behind an aging, frustrated population with “a burden for economic development,” said Joachim Ragnitz, who studies eastern German regional development with the Dresden branch of the Ifo Institute for Economic Research.

Dr. Fratzscher notes that the AfD has hardly any economic strategy at all. But despite having a very slim chance of forming a coalition, Mr. Kalbitz said his party would use tax incentives to lure companies to Brandenburg to invest in its deteriorating infrastructure and poor internet access.

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But businesses in the region are already struggling with the rise of nationalism, including in Saxony, where violence broke out last year between neo-Nazis and protesters. Jens Drews, the regional spokesperson for computer-chip maker Globalfoundries Inc., which has operations in the state capital, Dresden, says it can be hard to attract skilled engineers.

“People can make it work here, but it takes a little more effort to convince people to come,” Mr. Drews says.

Dr. Ragnitz doesn’t expect much significant policy change to happen soon on a state level, given that familiar parties would likely band against the AfD. And even if the AfD’s growth further damages the local economy, he points out that Brandenburg’s and Saxony’s populations account for less than a tenth of Germany’s 83 million people.

Others see the consequences as much more far-reaching.

When Germany’s federal statistics office said in August that GDP growth had declined 0.1 per cent in the most recent quarter, it raised concerns that the world’s fourth-largest economy was entering a technical recession.

Though industry leaders have largely been reluctant to comment on the AfD’s rise, Mr. Kempf was not the first to send such a warning. In 2018, Siemens AG CEO Joe Kaeser tweeted that the AfD’s brand of nationalism “damages the reputation of our country in the world. Where the main source of German prosperity lies.”

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Siemens CEO Joe Kaeser says the AfD's nationalist politics hurt Germany's global reputation.

Hannibal Hanschke/Reuters

Dr. Ragnitz, however, believes Germany’s current slowdown is cyclical, simply following an almost decade-long boom. And Dr. Fratzscher noted that numerous economic signals, such as extremely low national unemployment – a record 4.9 per cent in March – are strong.

While Dr. Fratzscher says the economies of eastern states would suffer if the AfD makes great strides there, he sees the political consequences of Sunday’s elections on a national scale. Huge losses for Ms. Merkel’s Christian Democrats could lead to an internal revolt, he said. Should that lead to her being pushed out and stepping down, it could trigger a much earlier election than the one planned for late 2021.

The Social Democrats, meanwhile, are already in the middle of a search for a new federal leader. Should the elections aggravate that existential angst, the party could pull out of its formal “grand coalition” with the Christian Democrats, forcing the latter into an even weaker minority government. This, Dr. Ragnitz said, also has the power to create “a governmental crisis on the federal level and, presumably, to elections in 2020 for the Bundestag.”

In either case, both parties would enter an election weaker than before, potentially ceding ground to further left-wing parties such as Die Linke and the Greens, or to the right, with the AfD at its furthest edge. As such, Dr. Fratzscher said, “it’s in both interests to make the grand coalition work, do good work for the next two years, to be in a stronger position for the next federal election.”

Instead, he believes Germany’s established political parties should seize this moment and address the structural weaknesses that affect the eastern states and other have-not regions. It’s an opportunity for the more centrist parties, he said, to invest in wide-ranging infrastructure, including expanding internet access, and to attract companies to these regions.

“My hope,” said Dr. Fratzscher, “is that divergences won’t increase, but that the elections could be a wake-up call, and they will take peoples’ concerns more seriously.”

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