GERMANY: Chancellor Gerhard Schröder suffered a double defeat yesterday when voters in two key state elections punished his Social Democrats (SPD) and gave the party its worst regional election results since the second World War.
The Christian Democrats (CDU) swept to power in Mr Schröder's home state of Lower Saxony with a near absolute majority yesterday while retaining the state of Hesse.
Around 10 million voters in the two states showed their anger at the government's lack of progress at tackling the stagnating economy and 10 per cent unemployment, reflected in a 14 per cent drop in support for Lower Saxony in north-west Germany, an SPD stronghold for 13 years.
"This is a disastrous election result for the Social Democrats. It shows the great dissatisfaction of voters at state and federal level," said Mr Christian Wulff, the future CDU state premier in Lower Saxony.
The future looks grim for Mr Sigmar Gabriel, the outgoing state premier who took over from Mr Schröder and is often seen as the chancellor's political prodigy. The double defeat proves that lightning never strikes twice.
Mr Schröder's attempts to reheat the anti-war campaign message that helped him back into office in last year's general election failed to strike a chord with pessimistic voters more preoccupied with the government's broken promises on tax hikes and the unending economic gloom.
There was further good news for the CDU in the central state of Hesse, home to the financial capital, Frankfurt.
State premier Mr Roland Koch looked likely to be returned to power with an absolute majority. He called the vote a "the beginning of a new era for the CDU".
It marks a new era for the CDU on a federal level, strengthening their majority in the Bundesrat, the upper house where the federal states are represented, and enabling them to comfortably veto some, if not all, new legislation.
Opinion was divided yesterday as to whether that would help or hinder the long-promised reform of Germany's stagnant employment market and overburdened health system.
Some political analysts predict a political traffic jam, while some business leaders hope a "de facto Grand Coalition" will force the SPD and CDU to co-operate and push through unpopular reform without fear of an opposition backlash.
"We will seek to work together with the opposition in the Bundesrat on the necessary reform," said Mr Olaf Scholz, the chairman of the SPD. Until now, the tight majority of the CDU in the Bundesrat meant that Mr Schröder could slip legislation through the upper house by buying off one or two conservative-led states. Yesterday's elections put an end to that.
Dr Angel Merkel, the CDU leader, called yesterday's result "a great vote of confidence" in the CDU. "We will deal very carefully with this vote of confidence and have no intention whatsoever of blocking," said Dr Merkel. "Wherever the government makes sensible suggestions, we will back them. But where they set the wrong course, we will stand against it."
"This is a vote of no confidence in Schroeder and his government," said conservative Bavarian state premier Mr Edmund Stoiber, who was narrowly beaten by Mr Schröder in the September general election. "We're going to use this result to enforce a change in German politics."
