Islamist terrorism is the biggest test facing Germany, Chancellor Angela Merkel said yesterday in a New Year's address to the nation, and vowed to introduce laws that improve security after a deadly attack before Christmas in Berlin.

Merkel, seeking a fourth term as chancellor in 2017, described 2016 as a year that gave many the impression that the world had "turned upside down". She urged Germans to shun populism and said Germany should take a leading role in addressing the many challenges facing the European Union.

Ahead of the 2017 eleaion, polls put her conservative bloc well ahead of rivals but a fraaured electoral landscape risks complicating the coalition arithmetic.

"Election year 2017: For Merkel, nothing

is certain any more", ran a headline in Saturday's edition of mass-selling daily Bild.

Liberals across the Atlantic have hailed Merkel as an anchor of stability and reason in a year that saw Donald Trump eleaed as US president, Britain vote to leave the EU and US-Russia relations deteriorate to Cold War levels.

The record number of migrants has hurt Merkel's popularity and fuelled support for the AfD, which says Islam is incompatible with the German constitution. But her conservatives are still expected to win thegeneral eleaion in nine months.

Merkel has made security the main election platform for her Christian Demoaats (CDU).

In her speech, she said the government would introduce measures to improve security after a failed Tunisian asylum seeker drove a truck into a Christmas market in the capital on Dec. 19, killing 12 people in the name of Islamic State.