BERLIN (Reuters) - Riding a wave of momentum after a strong showing in a regional election, Germany's new anti-euro party said on Monday it was time for Chancellor Angela Merkel to wake up and accept it as a new conservative force in German politics.
Like the UK Independence Party (UKIP) in Britain and the National Front in France, the Alternative for Germany (AfD) has tapped into a vein of discontent with career politicians and bureaucrats, carving out a niche to the right of the mainstream parties.
On Sunday, it scored a surprise 9.7 percent in a state vote in Saxony, winning its first seats in a regional parliament and building domestic momentum following its entry into the European Parliament earlier this year.
Merkel's CDU has dismissed the AfD as a fringe party with far-right leanings, but if it builds on its Saxony success and enters two more eastern state parliaments in Thuringia and Brandenburg later this month, it could present a serious challenge for the chancellor.
Merkel's traditional partners on the right, the liberal Free Democrats (FDP), have virtually vanished from the German political landscape over the past year, narrowing the coalition options for her Christian Democrats (CDU).
Some CDU conservatives have urged the party to reconsider its ban on cooperating with the AfD, but Merkel dismissed that out of hand on Monday. "My goal is to ensure they play a smaller role as soon as possible," she said.
Frauke Petry, the 39-year-old businesswoman who headed the AfD's election campaign in Saxony, hailed the vote as "a sign that Frau Merkel should finally take the AfD seriously".
The CDU won by a clear margin, with over 39 percent of votes, and Stanislaw Tillich is likely to remain state premier at the head of a right-left coalition. But it was the CDU's worst result since taking power in Saxony after German unification in 1990. Exit polls indicated that it had lost 35,000 voters to its upstart rival.
The AfD's result beat all forecasts and put it fourth, behind the CDU, the Social Democrats (SPD) and the Left party. Overtaking the Greens, it knocked the FDP - Tillich's coalition partner in the state capital Dresden - and the far-right German National Democrats (NPD) out of the state assembly.
Petry rejected suggestions by the CDU that her party had fished for NPD votes, saying its policies were "once classic CDU and FDP positions".
"It's not the AfD that should ask itself where it stands, but the CDU that needs to ask whether it hasn't become a left-wing party," she said, a reference to Merkel's leftward tilt on social and economic policies.
Klaus Schroeder, a political analyst, said the AfD would not be fully established until it won national seats in the Bundestag, but added: "Any protest party is a risk if it takes away lots of voters - and nearly 10 percent is a lot of votes."
The AfD won nearly as many seats as the Social Democrats (SPD), Germany's oldest political party and Merkel's current partner in Berlin.
It has a chance of winning seats in both Thuringia and Brandenburg in two weeks' time. In Brandenburg, which surrounds Berlin, the SPD should keep power in a coalition with the Left. But in Thuringia, Merkel's CDU risks being booted out of office despite a lead in polls.
Because of the FDP's weakness, some conservatives are wary of dismissing the AfD, which has joined the same parliamentary faction as Britain's Conservatives in the European Parliament.
"Parties change. You should never say 'never' when it comes to coalitions," said Erika Steinbach, a right-wing CDU lawmaker.
If CDU did warm to the AfD - unlikely for the time being - they might find common ground on issues such as immigration and crime.
On Europe, however, the AfD is staunchly opposed to the euro zone bailouts that Merkel has helped to engineer and finance. "The CDU has to admit that its euro bailout policy is not working," said Petry.
Additional reporting by Noah Barkin; Writing by Stephen Brown; Editing by Kevin Liffey