Angela Merkel on Sunday became only the third German leader to win a fourth term as chancellor though her conservatives shed support as smaller parties made gains in the elections, among them the far-right Alternative for Germany (AfD).

Merkel’s Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (SCU) won 33% of the vote for the Bundestag.

Merkel acknowledged the decline in support from 41.5% in the last parliamentary elections in 2013, saying though she had secured the mandate to form a government, she had hoped for a stronger result.

The chancellor also stressed that nobody else had won enough votes to “form a government against us”.

The Social Democratic Party, with whom she formed a governing coalition four years ago, secured only 21% of the vote in their worst performance since 1949 and promptly announced that it would return to the opposition.

This leaves Merkel with only one option for a governing coalition — a three-party pact with the Greens and the pro-business Free Democratics (FDP), both of whom increased their vote share on Sunday. The FDP won more than twice the number of votes in did four years ago with 11%.

A senior official from the SPD stressed that the Greens and FDP now had a duty to cooperate in forming a government. It would make for a so-called Jamaica coalition — a reference to the parties’s black, green and yellow colours.

Merkel governed in coalition with the FDP between 2009 and 2013, and has hinted that she would be happy to include the Greens in government. The Frankfurter Allgemeine newspaper pointed out however that such an arrangement, would be less acceptable to her more conservative partners in the CSU.

But the newspaper also pointed out that Merkel overcame a dip in support due to her decision to open German borders to a million refugees, because voters were mindful that Germany has remained an island of prosperity and calm while political storms blow elsewhere.

The SPD’s Martin Schulz, her challenger for the chancellery, failed to capitalise on the discontent “showing here and there”, it said.

The AfD achieved that, swallowing up votes particularly in the former East Germany to become the third biggest party in the Bundestag. Its surge in support has raised fears in a country forever mindful of its Nazi past and protesters gathered near Berlin’s Alexanderplatz on Sunday night in a show of disapproval of the party’s anti-immigration policies.

“All of Berlin hates the AfD,” the protesters shouted.