Chancellor Angela Merkel has defended her government's handling of the flood of migrants that crossed into Germany last year, but conceded that more still needs to be done and that concerns that have led to increasing support for an anti-immigrant nationalist party need to be taken seriously.
Ms Merkel told politicians that since she addressed them at this time last year, Germany has managed to come a long way in dealing with the hundreds of thousands of migrants that flooded in to the country.
"The situation is many times better than a year ago, but there remains a lot to do," she said.
On the weekend, Ms Merkel's Christian Democratic Union suffered an embarrassing election performance in Mecklenburg-Western Pomerania, where Ms Merkel has her parliamentary constituency, when it was beaten into third place by the nationalist, anti-immigration Alternative for Germany, known as AfD.
The state is home to few migrants, but Ms Merkel after the election conceded that the result was more about dissatisfaction with national issues rather than local matters.
She told Parliament, where AfD is not represented, that the election was a "black eye" inflicted by "those who rely on slogans and seemingly simple answers". She said that voters' concerns "whether founded or unfounded, should be taken seriously" by "all of us in this house", noting that the party had taken away support from all other main parties.
"I am quite sure that if we resist this and stick to the truth, then we will win," she said. "And that way we will win back the most important thing that we need - the trust of the people."
In the past year, Ms Merkel said, Germany has implemented policies speeding up integration measures for migrants with good prospects of staying, increased school funding to help their educations, and worked with cities and states to find solutions to local problems.
Ms Merkel also stressed that the country managed to drastically reduce the influx of new migrants coming to Germany.
But she said the country still needs to improve the mechanism for quickly processing and returning home migrants who have little chance of being given asylum.
She said Germany has also beefed up police and security forces to fight terrorism, but emphasized that "terrorism is not a new problem that came here with the refugees."
"We serve our country in these times of globalization best if we are guided by our values of freedom, security, justice and solidarity," she said.