Germany: German Chancellor Gerhard Schröder suffered an embarrassing setback last night when the opposition conservatives won a narrow victory in regional elections in the north German state of Schleswig-Holstein.
The right-wing Christian Democratic Union (CDU) party emerged as the largest party, winning 40.2 per cent of the vote, according to exit polls.
Mr Scorcher's ruling Social Democrats (SPD) won 38.5 per cent. His coalition partners, the Greens, won 6.3 per cent, with the the opposition liberal FDP taking 6.7 per cent, polls suggested. The neo-Nazi National party of Germany (NPD) got just 2 per cent.
The SPD's incumbent state leader, Ms Heide Simonis, may stay in power, however, after the tiny SSW party that represents the state's 50,000-strong Danish-speaking minority said last night it would support her.
The result appears to confound opinion polls that suggested the SPD would win narrowly. It is a clear setback for Mr Schröder, whose centre-left coalition government had been enjoying a modest recovery.
"We did not achieve our primary goal in Schleswig-Holstein of a Red-Green majority," SPD national party leader Mr Franz Muentefering said after the vote.
The result of the general election in Germany next year now appears impossible to call, with the SPD and the CDU neck and neck.
For the opposition, the vote will provide a boost ahead of a crucial poll in the large industrial state of North Rhine-Westphalia on May 22nd and should ease pressure on embattled CDU leader Ms Angela Merkel.
"Red-Green has been voted out. They don't have a majority of their own," she said. "This is a good omen for the election in North Rhine-Westphalia."
The SPD has governed the small and sparsely populated state of Schleswig-Holstein, which borders Denmark, since 1988. But it appeared last night to have been heavily punished for its failure to cut unemployment - which in January passed five million nationally for the first time in Germany's postwar history. Unemployment in Schleswig-Holstein is 12.9 per cent, well above the west German average. The state also has huge debts.
Political observers had, nonetheless, expected the charismatic Ms Simonis to win.
Instead her conservative rival, Mr Harry-Peter Carstensen, appears to have beaten her, despite an often embarrassing campaign. Earlier this year, Germany's tabloid Bild offered to find Mr Carstensen a wife after he confessed he was lonely.
His opponents, meanwhile, dubbed him Panne Peter, a pun on Peter Pan which means Breakdown Peter, because of his frequent gaffes.