Bloomberg News

Merkel Faces State Vote That Heralds Election Handicap Next Year

March 15, 2012

Germany's Chancellor Angela Merkel. Photographer: Michele Tantussi/Bloomberg

Germany's Chancellor Angela Merkel. Photographer: Michele Tantussi/Bloomberg

The Social Democrat-led government in Germany’s most populous state vowed to take on and defeat Chancellor Angela Merkel’s party in elections in North Rhine- Westphalia, setting an example for next year’s federal vote.

Merkel’s Christian Democrats and two other opposition parties united in the state parliament in Dusseldorf yesterday to vote down the budget, prompting the minority government of Social Democrats and Greens to dissolve parliament and call new elections three years early. Twenty months after causing an upset by squeezing Merkel’s party out of power, polls suggest the SPD and Greens will win a majority at the vote due in May.

“We’re not backing away from the conflict,” the state’s SPD prime minister, Hannelore Kraft, said on ARD television today. “We sent a signal to Berlin in 2010 and we’re quite proud of that,” she said. “A good result at the election will send another signal to the country.”

The election in Germany’s one-time industrial heartland saddles Merkel with a third state poll in a year that was only supposed to have one such ballot. Saarland in the west will vote March 25 after the CDU-led coalition collapsed in January, while a ballot in the northernmost state of Schleswig-Holstein is slated for May 6.

North Rhine-Westphalia, which with 18 million inhabitants comprises almost a quarter of Germany’s population, is the most important of the three votes and may provide a template for Merkel’s fortunes in national elections in the fall of 2013.

Latest Poll

A snap poll in the state conducted yesterday put the SPD at 38 percent and the Greens at 14 percent, enough for an absolute majority. The CDU, led locally by federal Environment Minister Norbert Roettgen, had the backing of 34 percent, while the Free Democratic Party, Merkel’s national coalition partner in Berlin, looked poised to be voted out of the assembly with 2 percent, the Infratest-Dimap poll of 1,002 voters showed.

That will be weighed against Merkel’s personal ratings that are at a record high. The chancellor said yesterday that she welcomed the challenge to try and regain the state, which her party ruled for five years through 2010.

Kraft’s SPD took North Rhine-Westphalia from Merkel’s party at elections in May 2010, days after Merkel backtracked and agreed to a first bailout in Greece. The result deprived the German leader of her majority in the national parliament’s upper house, the Bundesrat, where states are represented.

‘More Stable’

“If it comes to new elections in North Rhine-Westphalia, then I think it’s good and proper that there’s no longer a minority government,” Merkel said in Berlin. Voters should be able “to opt for a more stable administration that by pursuing a more solid budgetary policy thinks more about the future and doesn’t undermine its options by piling up ever more debt.”

North Rhine-Westphalia has served before as a bellwether for German politics in general and Merkel’s fate in particular. A 2005 state election at which the CDU ousted the union-backed SPD after governing the region for almost four decades prompted then-Chancellor Gerhard Schroeder to call early federal elections in September of that year. He lost to Merkel, who assumed power in November 2005 at the head of a so-called grand coalition with his Social Democrats, minus Schroeder.

While Merkel was able to ditch the SPD in September 2009 and form a second-term government with her party’s traditional Free Democratic Party ally, support for the junior coalition partner has since collapsed. The FDP crashed out of five state parliaments in the seven state elections held last year. The SPD entered the state government in each of the eight state votes since North Rhine-Westphalia in 2010.

Unexpected Impasse

The unexpected impasse in the state capital, Dusseldorf, reached a head yesterday when the CDU and FDP joined the Left Party in blocking the budget. The former two parties objected to taking on new debt, while the latter supported increased spending.

“Although the opposition defeated this bill, they’re likely to lose dramatically in the election,” Ulrich von Alemann, a professor of political science at the University of Dusseldorf, said by phone yesterday. Polls suggest that Kraft “lost the vote in the assembly but probably won the election.”

With just 90 of the 180 seats in the Dusseldorf parliament, Kraft struggled to pass legislation since forming a government with the Greens in July 2010.

In March last year, Kraft denied that she planned to call early elections after a court ruled the 2010 budget to be unconstitutional. Then in July, her government was forced to amend a restructuring plan for WestLB AG at the last minute to secure the support of parliament for the proposal. North Rhine- Westphalia partly owns WestLB, a bank that was bailed out by its owners and Germany’s Soffin rescue fund after running up losses during the financial crisis.

Saarland Squabbles

In Saarland, voters go to the polls in 10 days after Merkel’s CDU ended its three-way coalition with the FDP and Greens there in January, blaming squabbling within the local FDP. Polls suggest the CDU and the Social Democrats will form a grand coalition after the vote, mirroring Merkel’s first-term national government.

The FDP will probably lose their assembly seats in both states, “speeding up their decline,” said Ulrich Deupmann, a partner at management adviser Brunswick Group Inc. in Berlin.

“Merkel will stand by the FDP as long as they can give her a majority in the Bundestag,” Deupmann said in an interview. “But if the party starts to fall apart and can longer do that, she’s not going to show them any consideration.”

To contact the reporter on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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