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imageBERLIN: German Chancellor Angela Merkel dismissed on Monday an anti-euro party's success in a weekend state election as a "protest vote" but admitted her party must do more to address constituents' frustrations.

Speaking at her conservative Christian Democratic Union's headquarters about the poll in the eastern state of Saxony on Sunday, Merkel said voters gave the Alternative for Germany (AfD) a nearly 10-percent result to send the mainstream parties a message.

"A big part of this result is a protest vote," Merkel told reporters.

"We, the CDU, need to address the issues (that concern voters) and solve these problems -- that is how these protests can be quelled."

Merkel said the issues were less the eurozone bailout packages that Germany has bankrolled -- the AfD's original rallying cry -- and more asylum policy, crime on the Polish and Czech borders, and the Ukraine crisis and relations with Russia.

"All the areas where you don't have answers yet -- there's a risk that opposition parties gain in strength," she said.

Marking its first entry in a German state assembly, the AfD party, which backs the dissolution of the euro and flirts with populist positions, exceeded pollsters' predictions with 9.7 percent of the vote.

"My aim is for them to play a marginal role very quickly," she said of its calls to jettison the euro.

Despite the AfD's strong showing, Merkel's CDU retained its 24-year grip on power in the state with 39.4 percent of the vote.

The CDU has said it would shun the AfD as a coalition partner, and will likely form a "grand coalition" with the Social Democrats like the one Merkel leads at the national level.

Formed in early 2013, the AfD narrowly missed entering the German parliament in last September's general election but won seats in the European Parliament in May.

In both of those polls, it turned in its strongest result in Saxony.

Merkel's CDU continues to hold a strong lead among parties at the national level with around 40-percent support.

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