Merkel's Bloc Loses German State Vote

BERLIN (May 9) -- Voters in Germany's most populous state dealt Chancellor Angela Merkel a painful setback Sunday, erasing her government's majority in the upper house of parliament and curbing its power after a stumbling start and criticism over the Greek debt crisis.

Merkel's center-right alliance was voted out of power in a state election in North Rhine-Westphalia, a region of some 18 million people that includes Cologne and the industrial Ruhr area, projections showed. It was the first electoral test since she started her second term in October.

"This is of course a warning shot for the governing parties, and the people should know that it has been heard," said Foreign Minister Guido Westerwelle, the vice chancellor and leader of the Free Democrats, Merkel's junior coalition partner. "We must make an effort to win back lost trust."

Merkel's conservative Christian Democrats won 34.5 percent of Sunday's vote - more than 10 points fewer than five years ago - and the Free Democrats 6.8 percent, according to projections by ARD television based on results from more than 110 of the 128 districts.

The coalition, whose makeup mirrors that of the national government, finished well short of a majority in the state legislature.

The main opposition Social Democrats finished with 34.5 percent and the Greens 12.1 percent, the projections showed. A hard-left rival, the Left Party, won 5.6 percent.

It wasn't immediately clear who would run North Rhine-Westphalia and whether conservative Juergen Ruettgers could cling onto the governor's office in Duesseldorf. The Social Democrats hoped to run the state with the Greens, but it wasn't clear whether they had won enough seats together.

Merkel will likely have a harder time running Germany - Europe's biggest economy - without a majority in the upper house, which represents Germany's 16 states and must approve major legislation.

She will have to haggle with the opposition - diminishing prospects of tax cuts intended to stimulate the economy and significant reform to the health-insurance system, both projects dear to the Free Democrats.

Merkel's federal government currently controls 37 of the 69 upper-house votes, including six from North Rhine-Westphalia.

Its stock has slid following a poor start, constant squabbling over policy and the challenge from the Greek crisis.

A senior Merkel aide said Sunday's setback had many causes - among them local problems and "too much unnecessary arguing on the public stage."

The Christian Democrats' general secretary, Hermann Groehe, also pointed to "the general uncertainty, people's concerns with a view to the stability of the euro, the situation in Greece."

Merkel initially held out on agreeing to aid for cash-strapped Athens, prompting German opposition parties to accuse her of avoiding an unpopular decision in the election run-up.

On Friday, however, parliament approved a bill allowing Germany to grant as much as euro22.4 billion ($28.6 billion) in credit over three years as part of a wider rescue plan.

A bigger problem with voters may have been the government's stumbling start at home. Freed last year from a "grand coalition" with the Social Democrats in which she shone as a consensus-builder, Merkel then got bogged down in internal divisions - notably about the wisdom of making big tax cuts soon.

The chancellor may soon be back to consensus-building without an upper-house majority - a frequent situation in Germany, which Merkel experienced in her first term. Opposition parties oppose tax cuts and plans such as extending nuclear power stations' lives.

"It's a good signal ... that North-Rhine Westphalia has said, 'this isn't how we want to live in Germany," Social Democratic leader Sigmar Gabriel said.

Gabriel said it was a "turning point" for the Social Democrats, who are still recovering from a heavy national election defeat in September.

They led North Rhine-Westphalia for nearly four decades until losing it in 2005 amid discontent over then-Chancellor Gerhard Schroeder's efforts to trim the welfare state.