BERLIN (Reuters) - Chancellor Angela Merkel on Wednesday charged her new government with healing divisions in German society that have fueled the far-right, equipping the economy for the digital era and bolstering the European project.

German Chancellor Angela Merkel addresses the lower house of parliament Bundestag in Berlin, Germany, March 21, 2018. REUTERS/Fabrizio Bensch

Delivering her first government statement to parliament since beginning her fourth term last week, Merkel defended her 2015 decision to welcome more than 1 million migrants but said there could be no repeat of the influx.

Society had grown more divided and angst-ridden, said the chancellor, 63, whose fourth term is likely to be her last.

“Something has changed in our country,” she told the Bundestag lower house of parliament. “Although our country is doing well, although our economy is doing its best since reunification, many people are worried about the future.”

Such angst, she conceded, hurt both her conservatives and their Social Democrat (SPD) coalition partners in last September’s national election, when the far-right Alternative for Germany (AfD) surged into parliament for the first time.

The AfD now leads the opposition, with the two groups in parliament - Merkel’s conservative bloc and the SPD - allied in their ruling “grand coalition”.

“At the end of this legislative period, I would like people to conclude that our society has become more humane, that divisions and polarization were reduced and perhaps even overcome, and social cohesion increased,” Merkel said.

Playing on the catchphrase “wir schaffen das” (“we can do this”) that she employed at the height of the refugee crisis, Merkel said Germany could become a more cohesive society and make the technological advances to be ready for the future.

“I am convinced, Germany can do this - and Germany means all of us,” she said.

To help assuage popular concerns, Merkel said the government would raise research and development spending to shape up the economy, which is enjoying robust growth but risks losing out to peers unless its businesses embrace new digital technologies.

She wanted the government to get Germany “a good way down the path into the digital age” by the end of the parliament, due in 2021, and to be able to see that “Europe is strengthened.”

She also charged her ministers with generating more cohesion in society at large, and - without naming him - put down her interior minister, Horst Seehofer, who last week told mass-selling newspaper Bild: “Islam does not belong to Germany.”

Merkel acknowledged Germany’s Judo-Christian historical background, before adding to loud applause: “Islam has become part of Germany.”

Describing the world as “uncomfortable and confusing”, she said Germany must secure its future in a reformed Europe that would keep friendly, close ties with Britain, with which a “very detailed, thorough free trade agreement” must be negotiated.

“We stand by Britain’s side in solidarity,” Merkel said with reference to a nerve agent attack in England. “A lot of indications point to Russia. That is why transparency is demanded of Russia.”

Merkel also criticized U.S. President Donald Trump’s plan to introduce tariffs on steel and aluminum imports as “unlawful” and warned Washington that the European Union was ready to take countermeasures if necessary.