UPDATE 4-Austerity blow for Merkel in German state election

May 13, 2012|Reuters

* Projections show worst post-war result in state for CDU

* Result could harden opposition to Berlin's austerity

* Centre-left SPD ride popular incumbent Kraft to big

* Upstart Pirates set to enter fourth regional parliament

By Stephen Brown

DUESSELDORF, Germany, May 13 (Reuters) - Chancellor Angela
Merkel's conservatives suffered a crushing defeat on Sunday in
an election in Germany's most populous state, a result which
could embolden the left opposition to step up attacks on her
European austerity policies.

German state with a bigger population than the Netherlands and

While she remains popular at home because of the strength of
the economy and her steady handling of the euro zone debt
crisis, the sheer scale of the defeat in NRW leaves her
vulnerable at a time when a backlash against her insistence on
fiscal discipline is building across Europe.

According to first projections, the centre-left Social
enough to form a stable majority with the Greens.

Merkel's Christian Democrats (CDU) saw their support plunge
the worst result in the state since World War Two.

Neugebauer, a political scientist at Berlin's Free University.
"The SPD is strengthened by this election, which will stir
things up in Berlin."

Elections in NRW have a history of influencing national
politics. Seven years ago, a humiliating loss for
then-Chancellor Gerhard Schroeder's SPD in the state prompted
him to call an early election, which he lost to Merkel.

For the past two years, the SPD and the Greens have run a
fragile minority government under the leadership of the SPD's
Hannelore Kraft, a tram-worker's daughter with a common touch
whose victory on Sunday could propel her to national prominence.

Sigmar Gabriel, national leader of the SPD, said the
convincing win could prompt speculation that Kraft would take on
Merkel in the federal vote next year, even though she has vowed
to stay in NRW. The SPD is due to pick a challenger to Merkel by
the end of the year.

"This is a clear signal to Berlin," said Kraft, wiping tears
from her eyes in a disco in the state capital Duesseldorf where
jubilant SPD supporters held celebrations.


France's new president, Socialist Francois Hollande, is due
Merkel to shift away from austerity and place more emphasis on
growth-oriented measures in Europe.

Other big countries like Italy also want Merkel to take a
more balanced approach to the debt crisis and an election in
Greece last week showed massive public resistance to tough
austerity that has pushed unemployment close to 25 percent.

A Socialist victory in France, coupled with the NRW result,
will give the SPD, which trails Merkel in national opinion
polls, new momentum before the federal vote in September 2013.

The chancellor needs the support of her centre-left rivals
to pass a new "fiscal compact" that is meant to anchor budget
discipline across the EU.

But the SPD is pressing her to delay a parliamentary vote on
the pact, keen for the government to commit to new growth
measures beforehand.

NRW, which shares a border with Belgium and the Netherlands,
is one of Germany's most diverse states.

It is home to one third of the country's blue-chip companies
but also some of its poorest cities. Coal and steel firms in the
Ruhr region where Kraft grew up once fuelled Germany's post-war
economic miracle. Now many have been shuttered and unemployment
in some areas is double the national average.

Many in Merkel's party will blame the result on regional
leader Norbert Roettgen, Germany's environment minister, who
bungled his campaign early on by refusing to commit to staying
in the state in the event of a loss.

NRW is Germany's most indebted state and Roettgen ran on a
platform of budget consolidation. Kraft advocated a go-slowly
approach to debt reduction, emphasising the need to invest in
cities, education and childcare.

The result will be seen by some as a double defeat for
austerity measures that she has forced on struggling southern
states like Greece, Spain and Portugal.

"The question arising from this election is whether people
still follow Merkel's way of doing politics in Germany," said
Erik Floegge, 26, a student and SPD supporter, who attended the
party rally in Duesseldorf.

"People don't want us to make hard cuts in social funding,
what we want is a 'New Deal' where both the social welfare state
and fighting debt will work."

Opinion polls show, however, that a majority of Germans back
Merkel's focus on debt reduction and that many don't want her to
soften her stance towards struggling euro partners.

coalition with Merkel's conservatives at the federal level,
scored 8.3 percent to make it back into the state assembly.

The party ended a string of humiliating regional
performances in a state vote in Schleswig-Holstein last week and
it hailed the NRW result as proof of a renaissance after a slide
in national polls over the past three years.

The upstart Pirates, a party that campaigns for internet
freedom and shot onto the national stage last year, continued a
strong run at regional level, making it into the fourth straight
state parliament with 7.8 percent of the vote.

The Greens scored 11.8 percent.