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Photograph: Filip Singer/EPA

Angela Merkel’s Christian Democratic Union (CDU) fought off a challenge from the far right in a state election on Sunday seen as the last big test for Germany’s political parties before a national vote in September that will end the chancellor’s 16 years atop German politics.

The CDU, whose current leader, Armin Laschet, will vie for the top job in September, improved on its 2017 performance to gain 37% of the vote in the eastern state, according to public service broadcaster ARD early on Monday. Reiner Haseloff, the state premier, said the result symbolised “a clear demarcation against the far right”.

The nationalist Alternative für Deutschland party (AfD) came second on 21% but underperformed in light of some polls that had suggested the far right would challenge the CDU for the top spot.

The president of the Central Council of Jews in Germany, Josef Schuster, expressed his relief at the AfD’s disappointing night, calling the outcome “a victory for democracy”.

Governed for the last five years by a “Kenya coalition” between the CDU, the Social Democratic party (SPD) and Greens, Haseloff could, in the next electoral term, switch to a power-sharing deal with the SPD and the pro-business Free Democratic party (FDP) – known as a “Germany coalition”, after the colours of the national flag – or a “Jamaica” alliance with FDP and Greens.

After a string of sobering results in state elections this spring, Sunday’s result amounted to “almost something like a comeback” for Merkel’s conservatives, wrote Der Spiegel. The CDU secretary general, Paul Ziemiak, described the outcome of Sunday’s vote as a “sensationally good result”.

Laschet had ruled out any form of power-sharing deal with the AfD in the run-up to the vote, saying his party’s “firewall” against the far right would stand firm.

Home to 2.2 million people, the Saxony-Anhalt state election does not reflect the standing of the six leading parties in the country as a whole. Support for the AfD, for one, is considerably higher and stable here than in other areas of Germany, in spite of its eastern branches pursuing more openly xenophobic policies.

But as the last state election before the national vote in September, the outcome will be eagerly examined for hints at broader underlying dynamics.

The lagging appeal of the leftwing Die Linke party and centre-left SPD in this area of what was once part of the socialist German Democratic Republic is representative of a broader malaise of the German left.

On 10.7% of the vote, Die Linke lost 5.6% of votes compared with its 2016 results – its worst result in this eastern state since the party’s foundation in 2007. Support for the SPD dropped to 8.2%, one of the party’s worst results at a state election full stop.

The Green party, which is still performing strongly in national polls, traditionally struggles in the German east, and will be the weakest of six parties in the next state parliament, on 6% of the vote. “We improved our result,” said the Green co-leader and chancellor candidate Annalena Baerbock, “but not in the way we had hoped to.”

The Greens, who even leapfrogged the CDU in some surveys after Baerbock was unveiled as candidate, have lost some momentum in recent weeks as other parties from across the political spectrum have started concentrating their fire on Green policies, such as a gradual fuel price increase.

The Free Democratic party, which is enjoying a nationwide resurgence fuelled by some frustration with the pandemic management of Merkel’s government, re-entered parliament in Saxony-Anhalt on 6.5% of the vote, ahead of the 5% threshold for parliamentary representation.

The FDP, a traditional junior ally of the CDU that shares its aversion to household debt, has also seen an upswing in support at a national level. Party leader Christian Lindner said he interpreted the result as a vote of support for his party’s economic competence and suggested reforms in the areas of digitalisation and education.

The CDU’s strong showing in Saxony-Anhalt likely has much to do with personality: Haseloff, who has been state premier here for a decade, enjoys approval ratings of 81%.

Whether the glow of his success will rub off on Laschet remains to be seen. Haseloff was one of the voices within the Christian Democratic party who spoke up against Laschet’s run for the top job.