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BERLIN (Reuters) - Germany's euroskeptic Alternative for Germany (AfD) party may win seats in its first western state on Sunday, buoyed by worries Greece's new anti-austerity government could unleash a fresh wave of turmoil in the euro zone.
The right-leaning AfD, which was founded in early 2013 to oppose euro zone bailouts, has been polling between 3 and 6 percent ahead of Sunday's vote in the northern city-state of Hamburg, the first of two regional elections in Germany this year.
Should the AfD reach the 5 percent threshold needed to enter the regional assembly, it would establish the party as a potential long-term rival to Chancellor Angela Merkel's Conservatives, who had hoped its success would be limited to the east where it already has seats in three states.
Votes for the AfD could also threaten the absolute majority of ruling state premier Olaf Scholz, a respected centrist in the Social Democrats (SPD), forcing him into a coalition with either the Greens or the Christian Democrats (CDU).
"The euroskeptics are polling right at the level of the 5 percent hurdle," said Carsten Nickel of global advisory firm Teneo Intelligence. "This would not only make another absolute majority less likely (though not impossible) for the SPD. Crucially, it would also further establish the AfD in the German party system."
Some political analysts had predicted the AfD may be just a "flash in the pan" like previous protest parties benefiting from fears about Greece. Once a one-issue party calling for the return of the Deutsche Mark, it has since widened its focus to include better education, more security and support for small businesses.
Hamburg, with its bustling port and cluster of media and aerospace companies, is Germany's richest state and has long been a stronghold for the SPD.
Voters in the city of 1.8 million are preoccupied by a housing shortage, improvements needed in education and plans to further deepen the river Elbe, all of which were hot issues in the run-up to the election.
The latest opinion poll showed the SPD winning 47 percent of the vote, falling just shy of an absolute majority, with the CDU coming a distant second on 17 percent, the Greens on 12 percent, the Left on 8.5 percent and the AfD on 5 percent.
The Free Democrats (FDP), which crashed out of the national parliament in 2013, are polling at 6 percent, suggesting they may break a string of three humiliating losses in state votes last year.
The second regional election is in Bremen on May 10.
Reporting by Caroline Copley; editing by Clelia Oziel