Germany’s political system is set up to exclude extremists. Yet the country is waking up to a new political reality that has lurched to the right with the once outcast Alternative for Germany (AfD) party now firmly established in German politics.

The far-right Alternative for Germany (AfD) and the Left Party jointly secured one third of seats in the new parliament, enough to block a loosening of Germany's debt brake - a mechanism some investors and political parties say stymies economic growth.

The Christian Democrats won with 28.6% of the vote while the far-right Alternative for Germany came second with 20.8%.

The far-right Alternative for Germany (AfD) and Germany's Left party between them garnered the one third of seats in parliament needed to block changes to the constitution, including a loosening of the debt brake which restricts deficits to 0.

The leader of the far-right Alternative for Germany (AfD), the second largest party in parliament after Sunday's election, said Germany's likely next chancellor would be held hostage by left-wing parties that would seek to loosen tough fiscal rules.

The far-right Alternative for Germany (AfD) was the clear winner of Sunday's parliamentary election in the states that make up the former East Germany, highlighting lasting divisions almost a quarter of a century since the country was reunified.

Friedrich Merz is set to become Germany’s next chancellor after his centre-Right Christian Democratic Union [CDU] party won the election on Sunday night.