BERLIN—Growing populist forces shook Europe’s pillar of stability this weekend, as an unprecedented defeat for Chancellor Angela Merkel’s conservatives in Germany signaled more political tumult across the continent.
For the first time in postwar history, Ms. Merkel’s Christian Democrats finished behind a populist challenger to their political right in a state election. Riding a wave of discontent with her migration policy, the Alternative for Germany—a three-year-old anti-immigrant party—beat the chancellor’s party in her home state, spurring her allies to debate Monday whether she should change course.
Beyond Germany, more political crossroads are approaching that could jolt Europe—as the migrant influx, terrorism fears, and antiestablishment sentiment complicate the recovery from years of economic problems.
A week from Sunday, an election in the city-state of Berlin is likely to deliver Ms. Merkel another setback, according to opinion polls. Two weeks after that, polls show voters in Austria’s second-round presidential election could crown postwar Western Europe’s first right-wing, populist head of state.
Later in the fall, Italy faces a constitutional referendum seen as an up-or-down vote on Premier Matteo Renzi’s pro-European government. And in December, Spain could face its third parliamentary elections in a year if its troubles in forming a government persist—a symptom of the same political fragmentation and antiestablishment sentiment dogging much of Europe.
Every populist success in one European country appears to be emboldening the populists in the next. “That which was impossible yesterday has become possible,” French nationalist leader Marine Le Pen wrote in a Twitter post late Sunday after the initial results of the populist Alternative for Germany, or AfD, came in. “The patriots of the AfD have swept away the party of Ms. Merkel. All my congratulations!”
Polls show Ms. Le Pen is likely to make it into the second round when France votes for a president in the spring.
The political turbulence has added to the challenges weighing on Europe’s economies, which, to the exception of Germany’s, remain anemic despite the European Central Bank’s years of ultra-easy monetary policy. In turn, the bank’s strategy, including large-scale bond purchases and negative interest rates, has sparked mounting complaints in Germany, in part because of its ill effects for the country’s millions of savers.
In an example of political and economic uncertainty feeding on each other, Germany’s finance minister said earlier this year that the ECB had contributed to the Alternative for Germany’s rise.
Amid the drama, European politicians will be closely watching events across the English Channel in Britain as a barometer of the consequences of turning away from the EU. It was in the U.K. that antiestablishment populists have scored their biggest success so far this year, winning the referendum to quit the European bloc.
A string of data there suggests the British economy appears to be regaining its footing following the Brexit vote—including a survey published Monday showing the U.K.’s powerhouse services sector bounced back to growth in August following a July slump.
The precise contours of the political debate differ across Europe, but the mounting disaffection with the establishment—often in favor of immigration, greater EU integration, and free trade—echoes from country to country.
Another major point of contention—refugee policy—has put Germany at the debate’s epicenter, after the arrival of more than a million asylum seekers since early last year. The three-year-old AfD has made opposition to Ms. Merkel’s acceptance of refugees the centerpiece of its campaigns, riding public disaffection with the chancellor to the biggest electoral gains by an upstart right-wing party in Germany in decades.
Its second-place finish behind the incumbent Social Democrats in the sparsely populated eastern state of Mecklenburg-West Pomerania on Sunday marked one of the AfD’s most striking advances yet.
With slogans such as “Politics for our own people!” the AfD finished with 20.8% of the vote, ahead of the 19% won by Ms. Merkel’s center-right Christian Democrats, traditionally the big-tent home for conservatives in a country long wary of nationalist populism. The AfD will now hold seats in nine of Germany’s 16 powerful state parliaments, building momentum ahead of the Berlin election later this month and the national election in September 2017.
In response to the regional defeat, the chancellor acknowledged the need to give Germans more confidence that the government had things under control, but said her migration policy remained on track. “I believe the fundamental decisions we made in the past months were right, but we have much to do to win back trust,” she said on the sidelines of the Group of 20 meeting of economic powers in Hangzhou, China.
In recent months, her government has sought to speed deportations of rejected asylum applicants and negotiated with Turkey to successfully stem the flow of Middle Eastern migrants across the Aegean Sea. Nevertheless, exit polls showed that the AfD drew voters from across the political spectrum in Mecklenburg-West Pomerania who were mainly motivated by the refugee issue and who wanted to send a message of discontent to the established parties.
“People have a diffuse feeling that the state no longer has this challenge under control,” said Mike Mohring, the Christian Democrats’ party chairman in the state of Thuringia. “More than anything, it’s a question of emotions and of rhetoric.”
AfD leaders, meanwhile, sounded emboldened. National co-chairman Jörg Meuthen said the party’s long-term goal was “to govern in this country.” AfD officials promised that Sunday’s vote spelled the beginning of the end of her chancellorship. Ms. Merkel has yet to announce whether she will seek a fourth term in Germany’s national elections next year, but a strong AfD showing in the national vote would likely complicate her efforts to form a new governing coalition.
“One cannot act in politics against the people, against the will of the people,” lawmaker Hans Michelbach, a conservative ally of Ms. Merkel, said Monday, urging her to be more responsive to public criticism of her refugee policy. “One must of course also take the concerns and fears of the people seriously.”
A tumultuous political season is in store for the rest of Europe as well: Austria’s October runoff election for president, a largely symbolic post, could be won for the first time by a right-wing populist, Norbert Hofer, according to polls.
In November, Italy is expected to hold a plebiscite on a constitutional reform aimed at creating more stable governments that has emerged as a referendum on Mr. Renzi, who has tried to rally support for the EU. The likely beneficiary if the referendum fails and Mr. Renzi resigns: the populist 5 Star Movement, founded by comic Beppe Grillo, which has surged to about 30% in the polls and whose left-right politics reflect the breadth of anger among Italians at their political class.
Meanwhile, Spain is struggling to form a government, despite two parliamentary elections since last December. The problem: two upstarts, including left-wing populists Podemos, have fragmented the political landscape and blocked efforts by Prime Minister Mariano Rajoy to negotiate a governing coalition. If the quagmire drags on, Spain faces yet another election this December.
—Andrea Thomas contributed to this article.
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