Angela Merkel's CDU party has suffered its second electoral blow in two weeks. As Laura Frykberg reports, to add to German Chancellor's woes the Bundesbank has warned German economic growth could slow in the third quarter.
More pressure mounts on Angela Merkel. Her CDU party has suffered another state election blow - this time in Berlin - coming second behind the Social Democrats. What's more - the anti-immigrant party - Alternative for Germany - won just over 14 percent of the vote, AND A PLACE IN PARLIAMENT. (SOUNDBITE) (German) AFD MAIN CANDIDATE FOR BERLIN, GEORG PAZDERSKI, SAYING: "This triumph shows that Alternative for Germany has arrived in the big cities. And the fact that we have grown so successful in a city that described itself as left-oriented, will have a big influence on the country." It's the worst result for the CDU in Berlin in 26 years. And could indicate how next year's general election might play out. One key issue is the problem. (SOUNDBITE ) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR SAYING: "There is no guesses, no surprises, in terms of what the major policy issue there is, of course it is immigration, it is having a pretty big impact on the way German voters are voting." Markets though weren't surprised by the result. Moving very little, despite two weeks of losses. Although it's still early days. (SOUNDBITE) (German) HEAD OF ANALYSIS OF CAPITAL MARKET AT BAADER BANK, ROBERT HALVER, SAYING: "There will be questions over the next weeks and months as to what this means for the general election when there are six parties in parliament. But before that happens, I would say Europe has arrived at a different reality, one of multiple parties. Totally stable political conditions are a thing of the past." So too perhaps the unstoppable German economy. The Oktoberfest may be in full swing But the Bundesbank has warned economic growth could slow in the third quarter, due to weak manufacturing export demand. ///