State election shakes Germany

BERLIN -- Chancellor Gerhard Schroeder, stunned by a devastating state election defeat yesterday in the party's longtime stronghold of North Rhine-Westphalia, announced that he would seek general elections later this year.

A grim-faced Mr. Schroeder told reporters that he expected the election to be held this fall, one year earlier than scheduled, because of the defeat in a state that is home to almost one in four Germans.

The election loss was the worst in a string of defeats that the chancellor said cast doubt on whether the country supported his economic reforms, including unpopular welfare cuts, designed to address persistent high unemployment.

"These reforms require the support of our citizens. The bitter result for my party in North Rhine-Westphalia has called into question the political basis for continuing these reforms," said Mr. Schroeder, 61, who narrowly won re-election in 2002 by opposing the U.S.-led Iraq war.

The announcement took the opposition parties and press by surprise and threw the country's usually orderly and predictable political scene into confusion.

The German Constitution calls for federal elections to be held every four years. Calling early elections is a complicated process that requires the approval of the German president, whose post is largely ceremonial, and a parliamentary vote of no confidence in the chancellor.

A snap poll conducted last night showed that if federal elections were held today, Mr. Schroeder's Social Democratic Party (SPD) would suffer a landslide defeat with just 29 percent against 46 percent for the Christian Democrats (CDU). The Greens, SPD allies, would get 8 percent, as would the liberal Free Democrats, traditional partners of the CDU.

Mr. Schroeder's center-left coalition of Social Democrats and Greens still has a slim majority in the Bundestag, or lower house of parliament. However, two chancellors, Willy Brandt and Helmut Kohl, called votes of confidence with the express aim of holding new elections, in 1972 and 1983 respectively.

Opposition leader Angela Merkel, who is expected to win the conservative nomination and could become Germany's first female chancellor, said she did not know how Mr. Schroeder would manage to arrange early elections but said her Christian Democrats would be ready for it.

"Every day that Germany isn't ruled by this coalition would be good day for Germany," she said.

TV projections showed the SPD slumped almost six points to around 37 percent in the western state of North Rhine-Westphalia, the industrial region regarded as the cradle of the German labor movement and home to its dwindling coal and steel industries. The CDU advanced almost eight points to around 45 percent, enough for it to wrest power from the SPD for the first time in 39 years in the state.

Mr. Schroeder has suffered a long line of regional election defeats caused by widespread discontent over his cuts in unemployment, health and pension benefits -- the biggest overhaul of the welfare system since World War II. His measures were widely backed by the CDU and are regarded by most economists as essential to stem a steady decline in Europe's largest economy.

But the measures have failed to cut German unemployment, which hit a postwar record of 5 million last winter and remains above 10 percent of the work force. The economy, famous for churning out top quality cars and machinery, is slowing down from its export-induced growth of 1.7 percent last year because German consumers are too worried about the future to go out and spend.

The country's six leading economic institutes last month cut their forecasts for German growth in 2005 to 0.7 percent, less than half their earlier projection of 1.5 percent.

The defeat in North Rhine-Westphalia is widely expected to lead to renewed calls from left-wingers in the Social Democrats for more popular policies such as taxes on wealth, and for a halt to any new welfare cuts.