Merkel’s Nuclear Policy Rejected as Greens Surge in Voting
March 28, 2011, 3:39 AM EDTBy Tony Czuczka and Patrick Donahue
(Updates with E.ON shares, euro in fifth paragraph.)
March 28 (Bloomberg) -- German Chancellor Angela Merkel’s coalition was defeated in its southwestern heartland and failed to win control of a second state as the anti-nuclear Greens vote surged to a record, forcing her to reassess energy policy.
The Greens are poised to enter the regional governments in Baden-Wuerttemberg and Rhineland-Palatinate after yesterday’s state elections conducted in the shadow of the nuclear disaster in Japan. In Baden-Wuerttemberg, the Greens are set to lead their first state administration, ejecting Merkel’s Christian Democrats from power in Stuttgart after 58 years.
The shift would grant the Greens sway over policy affecting a state whose economy is bigger than Belgium and Luxembourg combined, driven by companies such as Porsche AG, SAP AG and Daimler AG. It would also hand them control of Germany’s third- biggest utility, EnBW Energie Baden-Wuerttemberg AG, and its four nuclear plants just as the Japan crisis fans public fears over reactor safety.
“Merkel’s coalition in Berlin must take a huge slice of the blame” after voters’ “complete rejection of her nuclear policy and her leadership,” Hans-Juergen Hoffmann, head of the Psephos polling company, said by phone. “That a booming economy in the land of Daimler and Porsche played a backseat role in the region’s election is a turning point in the fortunes of the federal coalition.”
Euro Drops
German utility shares rose, with E.ON AG, the country’s largest power company, gaining 0.5 percent to 21.53 at 9:16 a.m. Frankfurt time. The euro fell 0.3 percent to $1.4043.
The Christian Democratic Union took 39 percent in Baden- Wuerttemberg, its worst result in the state since 1952, while its Free Democratic Party coalition partner won 5.3 percent, preliminary official results showed. That leaves the parties -- the same constellation as Merkel’s federal coalition -- short of a majority and may spell the end of CDU rule, uninterrupted since 1953.
The Greens took a record 24.2 percent, while the Social Democrats, the main opposition party nationally, won 23.1 percent. The SPD, which also opposes nuclear power, said it is prepared to rule in coalition with the Greens.
“There won’t just be a changing of the guard in Baden- Wuerttemberg, there will be a change of politics,” Greens national co-leader Claudia Roth said in Berlin. It will be “a historic watershed in 31 years of Green history when we vote in a Green premier” in the state. “Let the future begin.”
Rhineland Results
In the neighboring state of Rhineland-Palatinate, the Social Democrats led by Kurt Beck took 35.7 percent, forcing them to search for a coalition partner after governing alone. While Merkel’s CDU pushed the SPD close, taking 35.2 percent, the Free Democrats with 4.2 percent failed to retain their seats in the state parliament in Mainz, leaving the CDU without a coalition ally. The Greens took 15.4 percent, more than triple their tally at the last election in 2006, putting them in a position to join the SPD in government.
The twin ballots, the biggest electoral test so far of Merkel’s second-term government, are the latest in a run of seven state elections this year that allow voters to rate her policies from stemming Europe’s debt turmoil to her response to war in Libya and explosions at the Fukushima reactors in Japan.
With the CDU poised to lose Baden-Wuerttemberg, “Merkel may become a lame duck, nuclear power in Germany may become a memory,” Kit Juckes, head of foreign-exchange research in London Societe Generale SA, said yesterday in a note. “Sorting out Europe doesn’t get easier.”
Nationally, support for the Greens has surged since Merkel, reacting to the disaster in Japan, closed Germany’s seven oldest reactors for three months and suspended an extension of plant lifespans she pushed through last year pending safety checks.
‘We Understood’
“At the end of those three months, we will have to present a new energy policy,” said Peter Altmaier, the CDU’s deputy floor leader in the national parliament. Foreign Minister Guido Westerwelle, the FDP leader, said his party “understood” the message voters sent on nuclear policy. The issue is “something we really have to discuss” now, he said in Berlin.
About 250,000 people took part in demonstrations across Germany on March 26 calling for an end to atomic power, in what organizers said were some of the biggest anti-nuclear protests the country has ever seen.
A Greens-SPD win raises the chance of “an accelerated schedule for the permanent shutdown” of “some or all of Germany’s 17 nuclear reactors,” Mark Lewis, a Deutsche Bank AG analyst in Paris, said before the votes. “I don’t think the market has really grasped how deep the potential implications of these elections go.”
Merkel’s party suffered its worst defeat since World War II in Hamburg last month in the first of this year’s state elections. The CDU lost support in the second ballot, on March 20 in Saxony-Anhalt, as the Green vote unexpectedly doubled.
Stuttgart 21 Project
In Baden-Wuerttemberg, the Greens gained support last year as they tapped into public opposition to a high-speed rail project known as Stuttgart 21 that is backed by Merkel and the defeated CDU state premier, Stefan Mappus.
The Greens also opposed the state government’s purchase of a 45.01 percent stake in utility EnBW from Electricite de France SA for 4.7 billion euros ($6.7 billion) in February. The state now controls 92.3 percent of the voting rights in the company.
“Today, the final decision was made on ending nuclear power in Germany,” Sigmar Gabriel, national chairman of the opposition Social Democratic Party, said on ZDF.
For Merkel, who is now under “enormous pressure, and making mistakes,” the results diminish her authority even if she lacks a direct challenger before the next federal elections due in 2013, Lothar Probst, a political scientist at the University of Bremen, said in a phone interview.
“At some point, members of her party are going to start asking whether she can lead this party and hold it together,” Probst said. “This could well be the beginning of the end of the Merkel era.”
--With assistance from Brian Parkin in Berlin. Editors: Alan Crawford, Leon Mangasarian
To contact the reporters on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net; Patrick Donahue at pdonahue1@bloomberg.net
To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net
