Angela Merkel heads for fourth term, hard-right gains foothold in Parliament

Schulz said that instead the SPD would assume the role of main opposition party.

Merkel said she would seek to form a stable coalition government, either a "grand coalition" with the Social Democrats, or a three-party coalition with the liberal Free Democrats (FDP) and environmentally minded Greens.

The principal beneficiary was the anti-immigration Alternative for Germany which joins the pro-business Free Democrats, the Greens and the post-communist Left in the Bundestag after it channelled voter rage at Merkel for allowing some 1.3 million migrants to enter the country since 2015. But she observed that her party has been in power for the past dozen years, the last four of which have been "extremely challenging".

The anti-immigration Alternative for Germany (AfD) stunned the establishment by winning 13.1 per cent of the vote, projected results showed, a result that will bring a far-right party into parliament for the first time in more than half a century.

Such an arrangement is untested at the national level in Germany and widely seen as inherently unstable.

"For us, the grand coalition ends today", Manuela Schwesig told ZDF broadcaster. It puts Germany's first female leader and the first from the formerly communist east on track to match former Chancellor Helmut Kohl's record of 16 years in office. "We are the strongest party, we have the mandate to build the next government - and there can not be a coalition government built against us", Merkel added.

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A Jamaica coalition is a term used in German politics to describe a coalition made up of the Christian Democratic Union party, the Free Democratic Party, and the Green Party. "We have entered the Bundestag and we will change this country", Gauland said.

But Germans appear to have looked at the uncertainty in Britain and the USA after votes for Brexit and Donald Trump and plumped for stability. His party is now on course to enter a coalition government. While there is speculation that the FDP's relatively hardline stance toward Europe could threaten efforts to work with French President Emmanuel Macron on euro-area integration, "this argument is often overdone", according to Holger Schmieding and Florian Hense at Berenberg in London, who say the party's views would likely moderate over time.

As she starts her fourth term, there is no challenger in sight, but plenty of challenges ahead for Merkel, whom New Yorker magazine just labelled "the most powerful woman in a world filled with unstable men".

Schulz's defeat to Merkel means the Social Democrats haven't won an election since 2002, and raises a question mark over his fate as leader. But his surge quickly faded and he failed to convince voters to turn their backs on Europe's longest-serving leader.

Renate Künast, a leading Green, whose party did better than expected, said the result had to be seen as a slap in the face for the government, but it was the responsibility of all parties to address the concerns of AfD voters.

In the traditional post-election debate with the other party leaders on Sunday evening, Schulz said the SPD would form a strong opposition to the next government, which he said he was "sure" would be a three-way Jamaica coalition, since "Merkel will make any concession possible to hold on to the chancellery". The xenophobic party ran on an anti-immigrant platform with an emphasis on closing Germany's borders to migrants. "The education is another important topic so I think there are a lot of topics this year around that might influence people's vote". "They wanted to teach Merkel a lesson".


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