Merkel says Islamist terrorism is biggest test for Germany

German Chancellor Angela Merkel poses for photographs after the television recording of her annual New Year's speech at the Chancellery in Berlin, Germany, December 30, 2016. REUTERS/Markus Schreiber/Pool

BERLIN (Reuters) - Islamist terrorism is the biggest test facing Germany, Chancellor Angela Merkel said on Saturday 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.