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Chancellor Angela Merkels Christian Democratic Union held the eastern German state of Saxony in an election that saw an anti-euro party boost its status by entering its first state assembly.

Merkels party took 39.5 percent of the vote today, with the anti-capitalist Left party placing second with 18.8 percent, according to projections by national broadcasters ARD and ZDF. The Social Democrats took 12.3 percent, enough to form a coalition with the CDU, which has governed the state since German reunification in 1990.

The anti-euro Alternative for Germany, known as AfD, was projected to take 10.2 percent, while the CDUs Free Democratic Party coalition partner crashed out of the regional assembly in Dresden with 3.7 percent, below the 5 percent threshold to win seats. The Greens took 5.8 percent.

Saxonys record of favoring strong, center-right government was upheld today in the score of Merkels CDU, Carsten Nickel, senior vice president at Teneo Intelligence in Berlin, said in an interview. At the same time, the vacuum left by the Free Democrats exodus to the right of Merkels party was filled to a surprising degree by the AfD.

The vote extends the shakeup of German politics by giving a greater platform to opponents of the euro and probably ending the Free Democratic Partys streak in state governments after almost 70 years. The AfD narrowly failed to take any seats in the vote in national elections in September.

Saxony was the first of three eastern regions comprising half of the areas voters to hold elections in a two-week span. Brandenburg, which surrounds Berlin, and Thuringia vote on Sept. 14, rounding off the first set of electoral tests since Merkel won a third term in September. Merkel plans to comment on the Saxony vote at 11:45 a.m. Berlin time tomorrow.

CDU state premier Stanislaw Tillich rode personal popularity to victory in Saxony, home to 4 million people, though he will need another coalition ally if final results confirm the FDP has dropped out. While he didnt speculate on possible partners in television interviews today, Merkel has ruled out cooperation with the AfD nationally.

A center of heavy industry in former communist East Germany, Saxony is the richest of the six eastern states except Berlin and has the lowest per-capita debt of Germanys 16 states.

Alternative for Germany, which advocates a breakup of the euro area, campaigned partly on locally resonant topics such as education, families and fighting crime. Support for the anti-immigrant National Democratic Party was projected at about 5 percent, signaling it could retain seats in the legislature.

Alternative for Germanys tally shows the party has finally arrived in the German party political landscape, party chief Bernd Lucke told reporters.

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Merkels CDU Wins Eastern State Vote as Anti-Euro Party Surges