In state elections, her party, CDU, came behind the far-right, anti-immigration Alternative for Germany, or AfD, in her home state of Mecklenburg-Vorpommern.
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However, the party’s strong showing could weaken Mrs Merkel ahead of the national elections next year.
Speaking at a news conference at the close of the G20 summit in the eastern Chinese city of Hangzhou, Merkel said that there was 10 times as much direct investment in the European Union as in Africa.
Merkel on Monday added that she was aware that her policy on migration caused a decline in her popularity. The CDU result is down 4% from the 23% it secured in 2011, with the Social Democrats also down, by 5%, compared to the 35.6% they received in 2011.
“We are a country that puts the dignity of every single human being at the center of things”, she said. It won support from other parties and attracted those who usually do not vote, helping to raise the turnout from 51.5 per cent to 61 per cent.
The AFD is allied in neighboring Austria with the far-right Freedom Party, whose candidate Norbert Hofer almost won a national election earlier this year.
Petry, whose party has no prospect of going into government in the foreseeable future, complained that its rivals “still think they can label AfD as an undemocratic party”.
With her eyes on national elections next year, AfD co-chief Beatrix von Storch hailed the shock outcome as “the beginning of the end of the Merkel era”, while Bild daily labelled the result another “slap across the face” for the chancellor.
The attacks have given way to mockery by some Germans as well as foreigners, who have dubbed the recent weeks of bloodshed on social media as #MerkelSommer, or even “Merkel’s summer of slaughter”. Last week, she said that a fourth candidacy would be tied to whether she decides to seek re-election as party chairwoman in a ballot set for a party convention in December.
Germany has taken in nearly 1 million refugees, many of them Muslims fleeing war in the Middle East, over the past year.
New arrivals in Germany have slowed drastically this year, policies have been tightened and Mecklenburg is home to few foreigners. Lucke had targeted the euro, but the party grew because of the backlash against refugees.
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The German Chancellor’s party was relegated to third place behind an anti-immigrant party. However, the surging refugee crisis and Angela Merkel’s decision to host 140,910 asylum applicants in 2015, the largest number in Europe, has led to a bitter debate over the wisdom of the strategy. “Her district in parliament is there, she campaigned there, and refugees are her issue”.
