The opposition Social Democrats and Greens ejected Merkel's center-right alliance from the government of Lower Saxony state Sunday, winning a single-seat majority in its legislature. It was a major test before national parliamentary elections, which are due in September.

Merkel said "a defeat hurts all the more" when it is so close, but stressed how close her coalition came to winning and insisted that a victory seemed "completely impossible" a few months ago. That, she said after leaders of her Christian Democratic Union met Monday, "is also a good message, that we can win."

Still, Lower Saxony's CDU governor lost his job despite his personal popularity — and surveys show Merkel herself is considerably more popular than her coalition of the last 3 ½ years with the pro-market Free Democrats.

"Merkel is a queen without a country," charged Andrea Nahles, the general secretary of the main opposition Social Democrats. "It turned out that her virtual popularity in polls can't be transferred to the streets."

The combination of CDU and Free Democrats, which has a reputation for persistent infighting, hasn't won a state election since Merkel won her second term in 2009's national vote and has now lost control of four states.

Merkel stressed that she still wants to secure a new term for the combination nationally — though she also made clear that her party will pay greater attention to broadening its own support.

The opposition's campaign focuses on narrowing the gap between Germany's haves and have-nots, with measures such as tax increases and a crackdown on tax evasion.

Merkel and her party have been bolstered in national polls by a relatively robust economy, low unemployment and the chancellor's hard-nosed handling of Europe's debt crisis. They also have profited from a stumbling performance by her Social Democratic challenger, Peer Steinbrueck, while the Free Democrats took much of the blame for internal government squabbling — particularly over the party's unfulfilled demands for tax cuts.

On Sunday, tactical voting by conservative supporters helped the Free Democrats easily clear the 5 percent support needed to win parliamentary seats — which pre-election polls suggested it might not. But that weighed down the performance of Merkel's party without giving the combination enough votes to hold off the opposition.

The outcome is "not a good foundation for the national election campaign," said Gero Neugebauer, a political scientist at Berlin's Free University. "The distance between the chancellor's popularity and people's approval of the government's work is so large that that would give me cause for concern."

The result ends, for now at least, sniping within the Free Democrats about embattled Vice Chancellor Philipp Roesler's future as party leader. Roesler said Monday he would stay on — but that the party's veteran parliamentary caucus leader, Rainer Bruederle, will lead its election campaign.

Both sides will see Sunday's result as an incentive to mobilize their supporters, and Neugebauer noted that while the opposition alliance has helped its chances by presenting a united front, "the situation at federal level is a bit different" than in Lower Saxony.

A hard-left competitor that is strong in Germany's ex-communist east and not expected to join any government, the Left Party, is expected to win seats nationally, unlike in Lower Saxony — reducing the chance of a majority for the Social Democrats and Greens.

Recent national polls show a majority neither for Merkel's center-right coalition nor for the main opposition parties. That raises the possibility of Merkel — whose party consistently leads polls — returning to the "grand coalition" with the Social Democrats under which she ran Germany for four years after narrowly winning election in 2005. The centrist combination was popular with voters but disliked by both parties' supporters.

Merkel signaled that her party will now make a greater effort to shore up its support, and the Free Democrats can't expect any more favors. She said her party won't be afraid to emphasize differences with its partner, for example over whether to introduce minimum wages.

"It will be an election campaign in which everyone fights for themselves and their votes — and perhaps one of the lessons from Lower Saxony is that there shouldn't be so much fear of the Free Democrats disappearing," she said. "It's important for broadening the base that we don't take votes from each other in the same field."