Merkel to give up Germany CDU chair after 18 years - party source

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Preliminary final results from Sunday's election, seen as decisive for the future of Germany's increasingly wobbly coalition, showed the CDU slumping to 27%, the party's worst showing in the state since 1966 and a drop of 11 percentage points since Hesse last went to the polls in 2013.

The parties of German Chancellor Angela Merkel's right-left "grand coalition" took a beating on Sunday, strengthening fears that the second tough regional election in as many weeks could threaten the alliance's survival. When Hesse last elected its state legislature in 2013 - on the same day that Merkel was triumphantly elected to a third term as chancellor - they won 38.3 and 30.7 per cent, respectively.

She will also have to contend with pressure from her Social Democrat (SPD) junior coalition partners, who have also bled support in Hesse and are under pressure to rethink their alliance with Ms Merkel.

As the country's two traditionally dominant centrist parties flailed in Hesse, forces on either flank surged: The far-right Alternative for Germany (AfD) and the progressive Greens.

Mrs Merkel's conservative Christian Democratic Union was defending its 19-year hold on Hesse, previously a stronghold of the centre-left Social Democrats, the chancellor's federal coalition partners in Berlin. A very poor performance in Hesse could embolden critics to push for the Social Democrats to leave the federal coalition, and endanger the job of party leader Andrea Nahles. She has been chancellor for 13 years. Speculations in the German media arose that the results in Hesse could undermine Merkel's government in Berlin and even shatter her position ahead of her expected reappointment as the head of the CDU in December.

Annegret Kramp-Karrenbauer, secretary general of the CDU, is seen October 21 in Berlin during the election campaign.

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The outcome was an nearly exact replay of results in Bavaria two weeks ago, when the CDU's sister party, the Christian Social Union (CSU), was humiliated in a state where it has long governed without rivals. It's not clear if the CDU will now again unite with the Greens to form a government.

The protest party has eaten into both the CDU and SPD vote by railing against migrants and refugees as well as uncaring Berlin elites.

"Rather than outright instability in Germany and Europe, it simply means a continuation of the current leadership vacuum".

That's a major concession for Merkel, who for years has insisted that the chancellor should also be party leader.

Railing against the newcomers, the far-right anti-immigrant AfD is now the biggest opposition party in the Bundestag, and has seats in all of Germany's state parliaments.

She told party top brass her mandate running to 2021 will be "her last term", a party source said, adding that she has no plans to seek a post in the European Commission following that despite speculation to that effect in Brussels.