Chancellor Olaf Scholz’s ruling coalition suffered stinging electoral defeats in two key economic powerhouses, piling pressure on Germany’s fractious government in Berlin.
(Bloomberg) — Chancellor Olaf Scholz’s ruling coalition suffered stinging electoral defeats in two key economic powerhouses, piling pressure on Germany’s fractious government in Berlin.
As voter frustration deepens, all three governing parties shed support in Bavaria and Hesse, home to about a fifth of Germany’s electorate. The far-right Alternative for Germany — known as the AfD — emerged as the second-strongest force in Hesse and third in Bavaria, underlining its growing national presence.
Scholz’s three-way alliance has been beset by infighting, while voter concerns intensify over Germany’s economic malaise, a surge in migration and the war in Ukraine. The Social Democrats, the Greens and the Free Democrats lost a combined 12.2 percentage points in Hesse and 6.6 percentage points in Bavaria, according to preliminary results.
“The government coalition in Berlin has taken an enormous blow,” Carsten Brzeski, global head of macro at ING, said in a statement on the bank’s website. “These results can either lead to a full reset of the political agenda in Berlin or to a de facto standstill.”
In Hesse — the home of the Frankfurt financial hub — the SPD slumped to third place after a campaign led by Nancy Faeser — the federal interior minister — bringing the defeat closer to Scholz.
“The election result is very disappointing,” Faeser said in a TV interview. “Unfortunately, we were unable to break through with our topics,” such as free daycare for all kids.
Germany’s conservative bloc retained control of both states, ensuring political continuity. The Christian Democratic Union won 34.6% of the vote in Hesse, while its Bavarian sister party, the Christian Social Union, took 37% in the southern state around Munich. The CDU/CSU make up the largest opposition group at the national level.
In Bavaria, the anti-immigrant AfD was the biggest gainer, while the Social Democrats slumped to fifth. The FDP failed to get into parliament in Bavaria as expected and was right on the 5% threshold in Hesse, potentially prompting the pro-business party to oppose its left-leaning governing allies in Berlin even more.
Scholz has dismissed the AfD as a “demolition squad” that exploits the fears of ordinary citizens, but his administration has struggled to convince voters that Germany’s transition to a cleaner and more technologically advanced economy is worth the risk.
After distributing billions of euros in aid to soften the impact of the pandemic and the energy crisis, the chancellor has ruled out a stimulus program, even after Europe’s largest economy barely emerged from a winter recession in the second quarter.
An influx of refugees and migrants has added to the coalition’s headwinds, with the parties struggling to come up with convincing policies to ease concerns and leaving them open to attack from the AfD and the conservative bloc.
In the fallout from the votes, one scenario is that each of the three ruling parties “will only focus on itself and on how to reach the best possible outcome at the next federal elections, which could basically mean a reform standstill,” ING’s Brzeski said.
“The bitterest realization of the elections is that right-wing nationalism has also established itself in the ‘West’,” Joe Kaeser, former chief executive of Siemens AG, said in a social-media post. “It is time for the economic elites to actively make it clear that the AfD is not an alternative for maintaining German prosperity.”
The run-up to the Bavaria vote was overshadowed by an antisemitism scandal around the CSU’s coalition partner, the Free Voters. The regional party’s leader Hubert Aiwanger was under fire over links to a flier from the 1980s that threatened traitors to the “fatherland” with a “free flight up the chimney at Auschwitz,” the Nazi death camp.
While acknowledging the flier’s existence, Aiwanger said he wasn’t the author, and Premier Markus Soeder from the CSU decided there were insufficient grounds to dismiss Aiwanger.
Soeder’s messy handling of the scandal ended up hurting the CSU, which stumbled to its worst result in Bavaria since 1950. Support for the Free Voters strengthened, and the two parties will likely continue their alliance in Bavaria.
In Hesse, the CDU is expected to renew its coalition with the Greens.
–With assistance from Angela Cullen and Christoph Rauwald.
(Adds comment in 13th paragraph. A previous version of this story corrected the SPD’s placement in Bavaria.)
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