Merkel's party suffers another state loss as Eurosceptics scrape in

By Michael Nienaber and Erik Kirschbaum BERLIN (Reuters) - The Eurosceptic Alternative for Germany (AfD) party was set to win seats in a fifth straight regional parliament on Sunday after an election in the city-state of Bremen where Chancellor Angela Merkel's conservatives were badly beaten. The first projections by the ZDF TV network, from exit polls and early results, indicated that the Social Democrats (SPD) would win the vote in the smallest of Germany's 16 regional states with 33 percent. The SPD, which has ruled Bremen since 1946, is likely to renew its coalition with the Greens, who were seen winning 14.7 percent. The SPD and Greens were projected to win 42 seats in the 83-seat state assembly, ZDF said. The anti-bailout AfD was forecast to win 5.2 percent, narrowly clearing the threshold to win seats in its fifth regional assembly. The AfD has been snatching away votes from Merkel's conservatives since it was founded in 2013 to oppose euro zone bailouts for states such as Greece, but has recently been in decline, racked by infighting and an east-west split. The party had been registering up to 10 percent in national opinion polls last year, but has dropped to around 5 percent recently as a drift to the right - and a ferocious internal battle over its appeal to far-right voters - has frightened away centrist voters, especially in western Germany. "I believe that those disputes were a burden (for the results)," said AfD founder and leader Bernd Lucke. Chancellor Angela Merkel's conservatives suffered yet another regional drubbing in Bremen, despite her active campaigning in the northwestern port city. Her Christian Democratic Union (CDU) were on track to win 22.4 percent after taking 20 percent in the last vote in 2011. The CDU, also humbled in February in nearby Hamburg with a post-war low of 15.9 percent, has been ejected from power in six states since 2011 and now rules in just five of Germany's 16 regions. "We still believe we can do better in Bremen," said Michael Grosse-Broemer, the CDU's deputy floor leader in parliament in Berlin. "We won't give up. We'll keep on fighting." In the last regional election of 2015 before a crowded vote calendar next year, the pro-business Free Democrats (FDP) won 6.5 percent after 2.4 percent in 2011. They hope to return to the federal parliament in 2017 as a possible coalition partner for Merkel. (Writing by Erik Kirschbaum; Editing by Kevin Liffey)