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Merkel wins fourth term as German far-right party makes gains

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"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.

Chancellor Angela Merkel after she cast her vote in Berlin for in the Germany elections.

"Of course we would have preferred a better result", Merkel said, according to The Associated Press.

- Angela Merkel's Christian Democrats stretch their lead as the strongest force in parliament, despite a nine-percent dip compared to their 2013 haul. It was one of their weakest postwar showings.

After shock election results previous year, from the Brexit vote to the election of US President Donald Trump, leaders of Europe's establishment have looked to Merkel to rally the liberal Western order.

Merkel told supporters Sunday that "we want to win back AfD voters" by solving the country's problems and addressing their concerns, reports AP.

Smaller parties were the chief beneficiaries of the erosion in support for Germany's traditionally dominant parties - above all the right-wing Alternative for Germany, or AfD, whose support was just over 13 per cent. Apart from the challenge of the AfD, the task ahead is "first and foremost to ensure economic prosperity" and "to hold the European Union together and build a strong Europe", she said.

"This is a big day in our party's history".

"There's no guilt but there's always responsibility, and now we're going to have 90, I think it's up to 90, well I say openly racist people, in the Bundestag".

In some polls, the populist and Eurosceptic AfD - which was founded in 2013 - has placed third. Some supporters chanted "AfD!"

Last year, a German Jewish leader called the AfD's success in a state election in Mecklenburg-Vorpommern "a nightmare come true".

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Outside, hundreds of anti-AfD protesters shouted "all Berlin hates the AfD", "Nazi pigs", and other slogans, while several protesters threw bottles as police kept them away from the building.

This would leave Merkel in need of new coalition partners - possibly the pro-business Free Democrats, who staged a comeback after crashing out of parliament four years ago. 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 traditionally left-leaning Greens were seen winning around 9.5 percent and the Left Party some 9 percent.

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

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. "For us it's clear that we'll go into opposition as demanded by the voter".

The far-right Alternative for Germany (AfD), which took an anti-immigration and anti-Islamic line during the election campaign, managed to get into the federal parliament for the first time. However, a repeat of the current "Grand Coalition" with the Social Democrats is not the chancellor's only option.

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 Left Party is incompatible with the conservatives and all others have voted not to work with AfD. This will grant the party its first ever seats in the federal parliament since its formation in 2013.

Germany in particular is coping with the arrival of more than 1 million refugees and other new migrants, with tension with Russian Federation since Moscow's incursions into Ukraine, and with doubt about Europe's future since Britain voted to quit the EU.

"It is particularly important that we close this flank with. clear political positions", he said.

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