While a huge refugee influx has fuelled the rise of the anti-immigration Alternative for Germany (AfD) party, Merkel is also under pressure from her centre-left coalition partners the Social Democrats, who have enjoyed a sudden spike in popularity.
In view of the twin threat, Merkel and Horst Seehofer, head of the Bavarian CSU party, her traditional ally, on Monday said they had buried the hatchet after openly feuding over the migrant crisis.
“We will jointly head into this election battle,” said Seehofer, premier of Bavaria, who had long been Merkel's fiercest conservative critic over the influx that has brought more than a million asylum seekers to Germany since 2015.
Despite their unresolved differences – notably the CSU's demand to cap migrant arrivals at 200,000 a year from now on – they agreed to fight together in what Merkel said would be her “toughest election campaign” yet.
The latest poll results “challenge us to put up a decent fight” in September's general election, Merkel said at a joint press conference with Seehofer after a two-day meeting of the parties dubbed the “peace summit” by the media.
And Seehofer praised Merkel, saying that under her more than decade-long leadership, Europe's top economy was an “island of stability”.
Nonetheless, the atmosphere remained cool and Merkel's expression frosty.
News portal Spiegel Online said Merkel and Seehofer looked like “a deeply divided couple giving their marriage one last chance for the sake of the family”.
Threat from left
Despite her strong track record, Merkel faces multiple challenges at home, and a confused picture in Europe and internationally.
The AfD, which is close to France's far-right National Front and other European populists, has railed against Merkel's liberal asylum policy and has been polling at 12-15 percent in recent months.
And in a new challenge, the Social Democratic Party (SPD) has seen a sharp rise in support in recent days under new leader Martin Schulz, the former president of the European parliament.
In a newspaper poll on Monday, the SPD – having long played second fiddle to Merkel's party in a loveless “grand coalition” government – for the first time overtook her conservative bloc.
In the Insa poll published by mass-circulation Bild daily, it scored 31 percent against 30 percent for Merkel's CDU-CSU bloc.
Political analyst Oskar Niedermayer of Berlin's Free University cautioned that there had been “huge media hype” around Schulz, and that he was yet to outline his stance on a range of policy issues.
'World in turmoil'
Ahead of the election, which is expected on September 24th, the campaign looks set to be dominated by the migrant issue and domestic security.
The AfD has linked the mass migration, mostly from Muslim countries, with security fears fanned by several jihadist attacks, especially a deadly truck rampage through a Berlin Christmas market in December.
The rightwing party has also hailed the election of US President Donald Trump and last month met with European populists, including French presidential hopeful Marine Le Pen and Geert Wilders of the Dutch anti-Islam Freedom Party.
For Merkel, who is often dubbed the “queen of Europe”, challenges loom on the increasingly uncertain international scene.
While Berlin has long been in a tense standoff with Moscow over the Ukraine and Syria conflicts, question marks suddenly hover over its relationship with Washington under the Trump administration.
In recent weeks, Trump and US officials have threatened German auto companies that produce in Mexico, and accused Germany of exploiting an undervalued euro to take advantage of its trading partners.
Meanwhile, at the European level, Berlin and the rest of the EU face the coming Brexit divorce talks and uncertainty in France, where a new president is to be elected by May.
Seehofer said that in a “world in turmoil” the way Berlin defined its relations with London, Washington and Moscow was “of utmost importance for the people of Germany”.
Merkel pledged that her conservative bloc would offer a responsible leadership characterised by “stability and order and a measured, centrist approach”.