Schroder is `disappointed and saddened' by two state election results

Germany's beleaguered centre-left government suffered a double blow last night with a disastrous result for Chancellor Gerhard…

Germany's beleaguered centre-left government suffered a double blow last night with a disastrous result for Chancellor Gerhard Schroder's Social Democrats (SPD) in two state elections.

In the eastern state of Brandenburg, where the SPD saw its vote collapse by 15 per cent, the extreme right-wing German People's Union (DVU) looked set to enter the state parliament for the first time.

As the votes were counted last night, Brandenburg's prime minister, Mr Manfred Stolpe, made no attempt to disguise his shock at the scale of the SPD's losses.

"It is a deep disappointment and the worst thing is that the extreme right is in the parliament," he said.

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The DVU, which is led by a Munich-based millionaire publisher, out-spent the bigger parties in Brandenburg in the hope of capitalising on the state's high level of unemployment and repeating its success last year in the neighbouring state of Saxony-Anhalt, where it won 13 per cent of the vote.

In the tiny, southern state of the Saarland, the SPD vote fell by 5 per cent and they appeared certain to cede power to the opposition Christian Democrats (CDU).

Mr Schroder said he was "disappointed and saddened" by the results and accused the opposition of putting party political concerns before the interests of the country. Yesterday's losses may mean, however, that the chancellor has little option but to seek the support of the CDU as he attempts to push a massive package of spending cuts through parliament.

In Brandenburg, an impoverished state surrounding Berlin, the Social Democrats' vote fell from 54 per cent five years ago to 39 per cent yesterday.

The party will now be obliged to share power with the Christian Democrats, who saw their vote rise by more than 7 per cent to 26 per cent, or the ex-communist Party of Democratic Socialism (PDS) which polled 24 per cent - an increase of 5 per cent since 1994.

Both opposition parties last night offered to start talks with Mr Stolpe about forming a new coalition but most analysts regard an alliance between the SPD and the CDU as the most likely outcome.

In the Saarland, where the SPD prime minister, Mr Reinhard Klimmt, campaigned against the government's planned cuts, the CDU increased its vote by almost 7 per cent to win yesterday's election by a whisker.

Mr Schroder's junior coalition partners, the Greens, failed to win seats in either state yesterday and the opposition Liberal Free Democrats fared even worse, polling less than 3 per cent in both states.

It is not yet clear what effect yesterday's results will have on votes in Germany's upper house of parliament, the Bundesrat, where state governments vote as a single bloc.

But the Hamburg-based political analyst, Prof Joachim Raschke, said last night he was convinced that, from now on, Mr Schroder will effectively share power with the Christian Democrats.

"The CDU are now in effect part of the government in Berlin. They can block things, which I don't think they will, or they can exert their influence," he said.

The chancellor received some consolation yesterday from the news that the International Monetary Fund approves of his planned spending cuts, and from conciliatory remarks by trade union leaders ahead of a meeting with Mr Schroder today.

But the government faces four further electoral tests in the weeks ahead, beginning with a state election in the eastern state of Thuringia next Sunday and culminating in a bitterly-fought contest in Berlin on October 10th.