Blow for Merkel’s party may fuel opposition to austerity

Chancellor Angela Merkel’s conservatives suffered a crushing defeat yesterday in an election in Germany’s most populous state, a result which could embolden the left opposition to step up its criticism of her European austerity policies.

The election in North Rhine-Westphalia (NRW), a western German state with a bigger population than the Netherlands and an economy the size of Turkey’s, was held 18 months before a national election in which Mrs Merkel is expected to fight for a third term.

She remains popular in Germany for her steady handling of the eurozone debt crisis, but the sheer scale of her party’s defeat leaves her vulnerable at a time when a backlash against her insistence on fiscal discipline is building across Europe.

The centre-left Social Democrats (SPD) won 38.8 per cent of the vote and will have enough to form a stable majority with the Greens, who scored 12.2 per cent.

The two left-leaning parties had run a fragile minority government for the past two years under popular SPD leader Hannelore Kraft, whose decisive victory yesterday could propel her to national prominence.

Mrs Merkel’s Christian Democrats (CDU) saw their support plunge to just 25.8 per cent, from nearly 35 per cent in 2010.

“This is not a good evening for Merkel,” said Gero Neugebauer, a political scientist at Berlin’s Free University. “The SPD is strengthened by this election, which will stir things up in Berlin.”

The blow comes only days before France’s new president, Socialist François Hollande, is due to visit Berlin and press Mrs Merkel for a shift away from austerity and more emphasis on growth in Europe.

Mr Hollande’s victory, coupled with the NRW result, is bound to give the SPD, which still trails Mrs Merkel in national opinion polls, new momentum before the federal vote in the autumn of 2013.

The chancellor needs the support of her rivals to pass a new “fiscal compact” that is meant to anchor budget discipline across the EU. The SPD is already pressing her to delay a parliamentary vote on the pact, keen for her to commit to new growth measures beforehand. Many in her party will blame the result on regional leader Norbert Roettgen, Mrs Merkel’s environment minister in Berlin, who bungled his campaign early on by refusing to commit to staying in the state in the event of a loss.

Mr Roettgen ran on a platform of budget consolidation in a state that, with €180 billion (£144bn) in debt, is Germany’s most indebted. Ms Kraft, on the other hand, advocated a go-slowly approach to debt reduction.

In that sense, the result will be seen by some as a double defeat for Mrs Merkel. Voters in NRW not only rejected her party but also the austerity measures that she has forced on struggling southern states such as Greece, Spain and Portugal.

The Free Democrats (FDP), a pro-business party that rules in coalition with Merkel’s conservatives at the federal level, scored 8.6 per cent to make it back into the state assembly. The party hailed the result as proof of a comeback after a collapse in support over the last three years.

The upstart Pirates, a new party that campaigns for internet freedom, continued their strong run at regional level, making it into their fourth straight state parliament, winning 7.6 per cent of the vote.

NRW, a diverse state with struggling cities in the rust-belt Ruhr region and home to one third of Germany’s blue-chip companies, has a history of influencing national politics.

Seven years ago, a humiliating loss for then-chancellor Gerhard Schroeder’s SPD in the state prompted him to call early elections, which he subsequently lost to Mrs Merkel.