Far-right state win shakes Germany's fragile coalition

German state elections that dealt a heavy blow to the parties in Chancellor Olaf Scholz's government and historic wins for two anti-establishment parties are likely to aggravate instability in an already fractious ruling coalition.

With only a year to go before a national election in Europe's largest economy, Sunday's results look set to increase the pressure on Scholz to be tougher on immigration and intensify the debate over support for Ukraine as issues that dominated campaigning.

The German government's faltering authority could also complicate European policy when the bloc's other major power neighbouring France is still struggling to form a government after snap elections in June and July.

All three parties in the federal government looked to have lost votes in the elections in Thuringia and Saxony, according to early projections, which underscored the demise of Scholz's Social Democrats (SPD) as a big-tent party. The projections by pollster Forschungsgruppe Wahlen published at 1900 GMT put it on just 6-7.6 per cent of the vote.

Junior coalition partners, the Greens and pro-business Free Democrats, were at risk of being evicted from the Thuringia state parliament for failing to meet the five per cent threshold.

Analysts said the most likely impact of the results would be increased bickering within Scholz's ideologically heterogeneous coalition.

"For us it's going to be about asserting ourselves more strongly," Kevin Kuehnert, SPD party general secretary, said late on Sunday. "Not letting ourselves be led by the nose by parties that have just been kicked out of a state parliament."

The results reflect the growing fragmentation of the political landscape and rise of anti-establishment parties across Europe as governments have struggled to deal with crises including the Ukraine war and inflation.

The far-right Alternative for Germany (AfD) was the big winner of the evening, securing 33.2 per cent in Thuringia in its first regional election yet, and also gaining almost as many votes as the conservatives in Saxony.

Meanwhile, the leftist populist Sahra Wagenknecht Alliance (BSW), won more votes than all three parties in Scholz's coalition, gathering 11.5-15.6 per cent of the vote just eight months after its founding.

The strength of these anti-Nato, anti-immigration and Russia-friendly parties will make forming ideologically coherent coalitions ever harder at both state and federal level.

The coalition partners, in government since 2021, were at odds even before the elections, as tensions had erupted late last year over the budget for this year and next year.

Their union was originally billed a coalition of progress, but Greens co-leader Omid Nouripour last month called it a "transitional government", bemoaning the "many, many superfluous disputes" as well as fundamental ideological differences in particular with the FDP.

FDP deputy leader Wolfgang Kubicki said on Sunday the election results showed the coalition had "lost its legitimacy" and was harming his party, which must have consequences.

"With the 2025 budget bill still featuring a gap of some 12 billion euros ($13.25 billion), renewed coalition tensions are likely," said Carsten Nickel at Teneo in a research note.

"If there is no political implementation, no real changes, no reforms, voters can say the political process has been hijacked by the elites," said political scientist Oliver Lembcke at the University of Bochum. "It's a vicious circle."