A nationalist party has seized on the death to argue that Merkel's government bears a share of the blame.
"If it turns out that (the perpetrator) was an Afghan refugee then that needs to be condemned, absolutely, just like with any other murderer," Merkel said in an interview with public broadcaster ARD.
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The victim, a 19-year-old medical student, vanished in mid-October on her way home from a party in the southwestern city of Freiburg. Her body was found in a river.
Police say the suspect, who was arrested on Friday, was linked to the crime through DNA evidence and video footage from near the scene. The teenager, who entered Germany last year as an unaccompanied minor, hasn't made a statement. His arrest, however, has played into ongoing tensions about the arrival in Germany last year of hundreds of thousands of migrants.
Joerg Meuthen, a co-leader of the nationalist Alternative for Germany party, argued Sunday that Merkel and Vice Chancellor Sigmar Gabriel bear "a decisive share of the responsibility for this cruel act and many other 'isolated cases' that have happened daily in Germany since the unhindered entry of illegal immigrants."
The nationalist party rose in polls following last year's migrant influx and hopes to enter the national Parliament in an election next year in which Merkel is seeking a fourth term. In the US, businessman Donald Trump focused on crimes linked to immigrants in the country illegally as part of his successful presidential campaign.
Merkel's deputy said the student's death must not be used for "rabble-rousing and conspiracy propaganda."
"It is clear to everyone that refugees can commit equally terrible crimes as people born in Germany," Gabriel told yesterday's edition of the Bild daily.
Merkel's spokesman, Steffen Seibert, condemned the "appalling crime," telling reporters in Berlin that "the perpetrator must be punished with the full force of our laws." While many Germans have welcomed refugees, there has been strong opposition from a vocal minority.
A string of sexual assaults and robberies on New Year's Eve in Cologne blamed primarily on foreigners also fed fears, as well as accusations that the media were slow to report on such incidents.
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