Chancellor Angela Merkel is at a defining point in her fourth term as German leader amid opposition from her political allies over migration.
Her sister party, the Christian Social Union (CSU) from the Bavarian region, is against Merkel's stance on migration. The allied party wants German police to prevent refugees, who are already registered as asylum seekers in other European countries, to enter Germany. However, Merkel blocked the proposal last week, starting a spat with her interior minister and chairman of the CSU, Horst Seehofer.
The clash has escalated into a power struggle between Merkel's party (CDU) and the CSU, which have long been key allies. Together, both parties call themselves The Union and agreed that the CSU operates in Bavaria, while the CDU operates in all the other states. The CSU is traditionally slightly more conservative than Merkel's CDU.
"This is definitely the worst crisis she has faced in her 13 years as German chancellor," Holger Schmieding, chief economist at Berenberg Bank, told CNBC's Annette Weisbach Monday.