SINCE reunification in 1990, Saxony has been the former East Germany’s biggest success story. As one of Germany’s 16 federal states since then, it has been governed continuously by the centre-right Christian Democrats (CDU). Its education system is considered Germany’s best. Its economy is thriving, with world-class regional clusters in high-tech and carmaking. So there was never any question that Stanislaw Tillich, the state’s understated and popular CDU premier, would stay in power after Saxony’s election on August 31st. His party won more votes than the three leftist parties combined. With 39.4% of votes, Mr Tillich claimed victory.

And yet that result was the CDU’s worst ever in Saxony, causing worries as the party approaches elections on September 14th in Thuringia and Brandenburg, also in former East Germany. The left-leaning Social Democrats (SPD) and ecology-minded Greens have reason to fret, too. They all did worse than they had hoped, largely because they lost votes to a populist party to the right of the CDU: the Alternative for Germany, led by Frauke Petry (pictured).

Founded last year, the Alternative began with only one policy: a call for the orderly unravelling of the euro as a currency zone. To this it has since added other conservative positions, such as opposition to public deficits and gay marriage. In some ways it resembles America’s Tea Party. In Saxony, where it is strongest, it has increasingly emphasised tougher controls on immigration and border crime, often with xenophobic innuendo.

Though still chaotic in its party organisation and evolving in its views—for example, the party is squabbling over whether to criticise Vladimir Putin or coddle him—the Alternative has been rising stunningly fast. It came close to entering the federal parliament last September and succeeded in entering the European one in May. With 9.7% of the vote in Saxony, it now enters its first state parliament. It hopes to do so in Thuringia and Brandenburg, too.

The new party’s success is causing upheaval in the German political landscape, accelerating the implosion of its only liberal party, the Free Democrats (FDP). With just 3.8% of votes in Saxony, the FDP failed to clear the 5% threshold to enter parliament and was ejected, as it has been from seven other state parliaments since 2011 and the Bundestag last year. For the first time since 1946, the FDP does not participate in any state or federal government. This eliminates the liberals as the CDU’s coalition partner, perhaps permanently.

A more positive side-effect of the Alternative’s ascent is its cannibalisation of the NPD, a neo-Nazi party. (A proposal to ban it is now before Germany’s supreme court.) About 13,000 of its voters migrated to the Alternative, causing the NPD to fall 809 votes short of re-entering the Saxon parliament. After that loss, it has seats in only one other state and could fade away, with or without a ban.

The CDU so far refuses to contemplate a coalition with the Alternative. Led nationally by the chancellor, Angela Merkel, the CDU is pro-European and pro-euro, and so moderate as to be increasingly indistinguishable to many voters from the SPD, with which it governs in a “grand coalition” in the Bundestag. On September 1st Mrs Merkel, Mr Tillich and the CDU leaders in Thuringia and Brandenburg said again that discussions with the Alternative are taboo. Mr Tillich will try to form a coalition with the SPD or the Greens.

Ignoring the Alternative will not remove it as a problem for the CDU. In effect, the Alternative has in one year become on the far right what The Left is on the left. Descended from East Germany’s Communist Party and unreconciled to Germany’s capitalist system and its Western alliances, The Left remains strong in the eastern states. In Saxony it came in second with 18.9% of the vote. The comparatively moderate SPD has so far ruled out The Left as a partner in the Bundestag (they govern jointly in Brandenburg). But their competition splits the left vote and often leads to unproductive ideological bidding wars.

The Alternative will increasingly play the same role on the right vis-à-vis the CDU. On September 1st, Mrs Merkel suggested that, short of negotiating with the Alternative, the CDU must begin dealing with the concerns, rational or not, of its supporters. These range from fears about crime in the regions along the borders with the Czech Republic and Poland, to hysteria about “welfare tourism” by foreigners. The Alternative will be at its shrillest and strongest every time the euro crisis returns to the headlines. This will restrict Mrs Merkel’s leeway to agree to new rescue packages, or even to ease her austerity drive.