German election


"The German voters are swinging to the right in order to punish the political left for being too liberal". This astute comment on the fallout from Sunday's defeat of the Social Democrats in North-Rhine Westphalia underlines the potential consequences for Germany - and for its European partners - from the issues at stake.

It is now expected that Germany will go to the polls in September and that the Christian Democrats will emerge as the majority party then.

The Social Democrats were roundly defeated in North-Rhine Westphalia, a traditional industrial stronghold of theirs, by the resurgent Christian Democrat party led more effectively by Dr Angela Merkel. Whereas 11 of the 16 were led by the Social Democrats when they came to power in 1998, only five of them are now. This shift is fully registered at national level through the länders' representation in the Bundesrat, the federal upper chamber, where their political weight enables the Christian Democrats to influence national legislation.

Frustration about this growing dependency provoked chancellor Gerhard Schröder to seek general elections one year ahead of the usual date. It will involve arranging a vote of no confidence in his government and obtaining a presidential decision. His party is being blamed by its supporters for proposals on labour flexibility, job safety and welfare rights which have arisen from terms imposed by the Christian Democrats as their price for continuing support in the Bundesrat.

Behind this lies another political failure. Mr Schröder calculated two years ago that a roughly similar programme of economic and labour market reforms would by now have been successful enough to boost his chances of winning an election next year. It was not to be. Economic growth remains sluggish, unemployment is at a post-war high and there is little sign of any new dynamism or confidence that this will change. The reforms which have come through have thoroughly antagonised traditional Social Democrat supporters.

To win them back the Social Democrat leadership must now decide whether to reinforce the anti-capitalist rhetoric tried out in North-Rhine Westphalia - or to abandon any prospect of another Red-Green pact and prepare the ground for a grand coalition with the Christian Democrats which could force through a more rigorous programme of reforms after the election. German voters are thus facing many of the same problems and issues which French voters have raised during the referendum campaign on the EU constitution on dealing with economic stagnation: social market versus market radicalism.