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Photographer: Pool/Getty Images Photographer: Pool/Getty Images

Chancellor Angela Merkel signaled she’ll use Germany’s economic power to turn a record influx of refugees to the nation’s advantage and urged citizens to reject social conflict fomented by nationalists with “hate in their hearts.”

In a New Year’s address devoted to the impact of the refugee crisis, Merkel said coping with migration will cost Germany “time, effort and money,” according to prepared remarks provided by her office on Thursday. If handled right, the challenges of today will be the opportunities of tomorrow, she said.

Merkel pressed home the point that she’s determined to treat the influx as a chance to modernize and rejuvenate Europe’s biggest economy, a stance that’s won her international accolades while eroding her poll ratings at home. The domestic fallout pushed other crises such as the unresolved conflict in eastern Ukraine and the threat of the U.K. leaving the European Union into the background in her outlook for 2016.

“Next year is about one thing in particular: our cohesion,” Merkel said. “It is important not to follow those who, with coldness or even hate in their hearts, want to claim Germanness solely for themselves and exclude others.”

Merkel’s popularity among voters declined since last summer as she insisted “we will make it” through the refugee crisis, an assertion she repeated in her speech, which will be nationally televised later Thursday and posted online subtitled in Arabic and English. With Germany facing an influx of 1 million or more asylum seekers this year, about half of them fleeing civil war in Syria, the chancellor has rejected calls from within her Christian Democratic-led bloc to cap the number of migrants.

Germany’s balanced budget, lowest unemployment since east-west reunification 25 years ago, rising real wages and “robust and innovative” economy mean the country is strong enough to master the challenge as it has others in history, said Merkel, who marked 10 years in power in 2015.

German Magnet

The chancellor’s warning to Germans to stand up against anti-foreigner sentiment reprised a line from last year’s New Year’s speech, underscoring concern in the chancellery about the risk of social conflict. Germany is the world’s top destination for asylum seekers, the United Nations said in a report published Dec. 18.

Merkel’s poll ratings have stabilized in recent weeks. While 57 percent said in a mid-December ARD poll they’re dissatisfied with her stance on refugees, 42 percent expressed support, 3 percentage points more than when the broadcaster last asked the question in the first week of November.

Support in the ARD poll for Merkel’s party bloc rose for the first time in almost five months, by 1 percentage point to 38 percent, after mostly holding at more than 40 percent since the September 2013 election. Alternative for Germany, a party that criticizes Merkel’s open-door policy and rejects the euro, held at 10 percent in the Infratest poll.

Germany’s 16 states plan to spend 17 billion euros ($18.5 billion) on the migrants next year as some struggle to balance their budgets, Die Welt reported, citing a survey. Spending plans are based on 800,000 refugees arriving in Germany in 2015, a number that has already been exceeded, the newspaper said. Finance Minister Wolfgang Schaeuble has said the task of sheltering refugees takes priority over other goals, such as taking on no new debt.