German Chancellor declares AfD state election win 'a disaster'

The far-right Alternative for Germany (AfD) has won state elections in north-eastern Germany, delivering the worst result for Chancellor Friedrich Merz's conservative party since 1949.

"It's a disaster," Merz said after the exit polls were published on Sunday, local time, but signalled that he would fight on as chancellor and continue his reform agenda after speculation that a bad result could prompt him to resign.

The AfD was set to win 37 per cent in the state of Mecklenburg-Western Pomerania, ahead of the centre-left Social Democrats (SPD) on 35.5 per cent and far in front of Merz’s conservatives, who got 5.5 per cent and barely crossed the threshold to enter the state parliament, according to exit polls on ARD public television.

Sunday's result looks like delivering another first-place finish at state level in a month for the AfD party , which tops national opinion polls but has been kept from power by the refusal of the other main parties to work with it.

In another election in the capital, Berlin, which also took place on Sunday, the far-left Linke party was at 24.5 per cent, while Merz's conservatives were at 20 per cent.

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The AfD also gained in strength in the liberal city, hitting 16 per cent. It is the first time the Linke topped polls in the state, where it wants to nationalise housing from corporate landlords and cap rents.

The elections in Mecklenburg-Western Pomerania, a largely rural state in the formerly communist east, and in the capital, Berlin, follow the 6 September election in Saxony-Anhalt, where the AfD came close to the rare feat of winning an absolute majority.

Elections in the two states would not usually draw much interest outside Germany, but the AfD's success in Saxony-Anhalt, which it sees as the first step towards winning federal elections due in 2029, has sent shock waves through Europe.

In just over a decade, the party, which wants to take tough action to deport foreigners with no right to stay in Germany, restore energy ties with Russia and quit the euro, has transformed itself from a fringe euro-sceptic movement to the country's most popular party.

The exit polls underscore the advances the AfD has made in recent years and raise fresh questions over the "firewall" strategy, under which the other main parties refuse to enter coalition agreements with it.

Elected last year on a promise of reforms to return Germany's stagnant economy to growth, Merz has struggled to win over voters, compounding resentment over unpopular pension, tax and healthcare reforms with a stream of communication missteps.

Disillusion with his government has hung over the campaigns in both Mecklenburg-Western Pomerania and Berlin, where voters have focused on issues including soaring energy and housing costs. Merz presented a consumer relief package on Friday that included tax cuts on gas and diesel.

Several people who voted in Mecklenburg-Western Pomerania said living costs were a major concern.