* Merkel's CDU, SPD brace for losses in Brandenburg andSaxony
* Elections could trigger breakup of Merkel's coalition
* AfD attracting voters with anti-immigrant message
* Greens also expected to make gains
By Joseph Nasr
MEISSEN, Germany, Aug 20 (Reuters) - A surge in support forthe far-right Alternative for Germany (AfD) party beforeregional elections next month in two former communist easternstates threatens to wreck Chancellor Angela Merkel's unwieldyright-left coalition government.
Merkel's conservatives and the centre-left Social Democrats(SPD) jointly run the state of Saxony, mirroring their coalitionat the national level in Berlin. In neighbouring Brandenburg,the SPD governs along with the radical Left Party.
Opinion polls suggest the anti-immigrant AfD could comefirst in both states in the Sept. 1 elections, in what would bea humiliating outcome for Merkel's party and the SPD, which haveruled Germany together for 10 of her past 14 years in power.
Losing Brandenburg, a state the SPD has run since Germanreunification in 1990, would intensify calls within the partyfor it to quit Merkel's coalition and to rebuild in oppositionfollowing a nationwide slump in its support to below 15%.
Similarly, defeat for Merkel's Christian Democratic Union(CDU) in Saxony, which it has run for three decades, would pilepressure on her preferred successor as chancellor, party chairand German defence minister Annegret Kramp-Karrenbauer.
The AfD has found fertile ground for its anti-migrantmessage in the two relatively poor eastern states, which share alarge mining region that is threatened by government plans tophase out coal.
"The AfD propaganda seems to be working and there is nothingthe CDU can do about it," said CDU voter Christian Hoffmann,pointing to an AfD poster in the historic Saxony town of Meissenthat read: "Money for pensioners, not for illegal migrants".
"If the AfD win, the (national) coalition is probably goingto fall apart," added Hoffman, 70, a retired mechanicalengineer. "They have been struggling to keep it together and thefallout from the elections could be the end of the government."
MIGRANTS
Merkel's coalition, which the SPD joined only reluctantlyafter the 2017 national election, has been weakened by disputesover asylum policy, the fate of an ex-intelligence chief accusedof far-right sympathies, and painful losses in regional votes.
Ominously for Merkel, her CDU lost votes to the AfD in theEuropean elections in May in Saxony as also nationwide.
The AfD stormed into the national parliament, the Bundestag,in 2017 on a wave of popular anger over Merkel's decision totake about one million mainly Muslim refugees fleeing wars andpoverty in the Middle East and beyond.
The AfD says the migrants pose a threat to German culture.It wants to turn away those who enter Germany withoutidentification documents, restrict migrant access to welfare,ban the construction of mosques with minarets and speed up thedeportation of rejected asylum seekers.
The AfD also says migrants are behind a spike in violentcrime, a view contested by other parties.
The town of Chemnitz in Saxony, birthplace of the anti-IslamPEGIDA movement, hit the headlines a year ago when it was shakenby the most violent far-right protests in decades.
In Meissen, a town of 28,000 and famed for its porcelainindustry, only 5.6% of the population are foreigners comparedwith a national figure of about 13%. But a debate last weekbetween the main election candidates was dominated by questionsabout the costs of integrating the migrants.
"The AfD is not racist. It is the only party that tells thetruth," said Dirk Fuckner, a 50-year-old sales manager who washanding out AfD flyers reading 'Resolute Deportation'.
"The people coming here are not refugees. Most are economicmigrants and they should go back," said Fuckner, a former CDUvoter who says he switched to the AfD in protest at Merkel's2015 decision to open Germany's doors to migrants.
But even if the AfD tops the polls in Saxony andBrandenburg, it is unlikely to enter the government of eitherstate because mainstream parties refuse to do deals with it.
The CDU and SPD could end up forging a coalition in Saxonywith the Greens, which like the AfD is experiencing a surge insupport nationwide. Though traditionally stronger in affluentwestern Germany, they are seen more than doubling their vote inSaxony and Brandenburg.
SPD TRAIN CRASH
With the AfD almost certain to come first in Brandenburgwith just over a fifth of votes, the only workable coalitionwould be led by the CDU, the second-largest party, and alsoinclude the SPD and Greens.
This would be yet another painful blow for the SPD, whichhas been embroiled in a protracted leadership contest since Junewhen Andrea Nahles quit after her party's poor showing in the EUelections.
The SPD will elect a new leader at a summit in December,when it is also expected to review its coalition with theconservatives, whose mandate runs until 2021.
"There is a good reason why we are electing a new leader inDecember," said Frank Richter, the SPD candidate in Meissen.
"Nobody wants to be in the driving seat when the traincrashes," he said, referring to the elections in Saxony andBrandenburg and in the eastern region of Thuringia in October.
"The pressure on the coalition is going to be massive. TheSPD may have no choice but to walk away."(Additional reporting by Thomas SeythalEditing by Madeline Chambers and Gareth Jones)