- The Washington Times - Monday, February 3, 2003

BERLIN, Feb. 3 (UPI) — German Chancellor Gerhard Schroeder said Monday that the weekend's two election reversals were the "bitterest" defeats in his political career.

"The SPD, yesterday, experienced one of its bitterest defeats," said Schroeder at a press conference after a party meeting. "At least the bitterest which I have experienced in my political career." The Social Democrats were routed by the opposition conservative Christian Democrats — the CDU - in Lower Saxony, Schroeder's home base and longtime Socialist stronghold, and in Hesse.

Asked whether he would step down, Schroeder replied, "I am not thinking of that." But he said he accepted responsibility for the defeat. "The government and I have to carry the central responsibility for this defeat," said Schroeder. "And I will do this."

Schroeder's anti-war stance failed to impress voters, as they punished his government for spiraling unemployment and a steep decline in the growth rate.

Analysts said the message from the voters was loud and clear: They want Europe's largest economy turned around, something Schroeder and his coalition of SPD and the Greens has failed to do.

German newspapers speculated Monday that Schroeder would reshuffle his Cabinet following the reversal at the ballot boxes, and some even suggested that the chancellor might even enter into a national coalition with the CDU. However, the government has ruled out those possibilities.

"There will be no changes in the Cabinet," government spokesman Bela Anda told reporters.

Though the anti-war stance may have failed to galvanize voters, it still remains popular. Various opinion polls indicate that a majority of Germans are against military strikes on Iraq, but economic concerns, including the introduction of new taxes after the September elections, took center stage on Sunday.

Some fear that continued opposition to war could have an adverse impact on Germany's economy. "We all agree with Chancellor Schroeder that war is not inevitable," said Thomas Schulz, a trader in Frankfurt. "But when all Europe agrees with America that Saddam (Hussein) has to go, why should Germany stand against it? I am sure the Americans are not going to like it."

The outcome in Lower Saxony ensures that the SPD cannot circumvent the Christian Democrat majority in the upper house of Parliament, the Bundesrat, and will force Schroeder to seek CDU support to get approval for new laws. Analysts said Schroeder will be forced into a working alliance with the conservatives to push through welfare and labor market reforms that are seen as necessary for the revival of the German economy.

Some SPD leaders say that losing the two states does not mean that the party's prospects of survival in government were bleak.

"In a way, the chancellor will gain from this because the CDU solidly backs these proposals," said a senior SPD politician close to Schroeder. Where the chancellor was likely to run into problems was in securing the agreement of his left wing and his government partners, the Greens.

The conservative opposition was extremely happy with the election results. "It especially pleases me that (Schroeder) was not successful a second time in exploiting the fears of people with populism regarding Iraq," said Angela Merkel, CDU president.

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