Enlarge imageBy Matthias Inverardi
DUESSELDORF, Germany (Reuters) - Chancellor Gerhard Schroeder’s Social Democrats (SPD) faced a major test on Sunday as the German state of North Rhine-Westphalia began voting in an election likely to set the tone for next year’s federal poll.
Schroeder’s SPD has ruled Germany’s most populous state for the past 39 years, but recent polls show they are lagging the centre-right Christian Democrats (CDU) by around seven points.
"Today NRW is voting -- and Berlin is trembling," read a headline in the Frankfurter Allgemeine Sonntagszeitung.
Some 13 million Germans are eligible to vote in western Germany’s former industrial heartland, once dominated by coal and steel, in an election dominated by national issues and one topic in particular -- Germany’s stubbornly high unemployment.
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The jobless total topped five million nationwide this year and surpassed one million in NRW partly due to Schroeder’s controversial labour market reforms, designed to spur growth.
The measures, including benefit cuts, have angered many from the SPD’s traditional core. Working class voters have kept Schroeder’s party in power in NRW for almost four decades, but many have indicated they will not vote on Sunday.
"After 39 years -- is the SPD’s era in NRW coming to an end?" asked Der Tagesspiegel newspaper.
OMINOUS SIGN FOR 2006
Schroeder has relied on widespread support in the state in his general election victories in 1998 and 2002. Defeat on Sunday would be an ominous sign for his government in Berlin.
It could also increase pressure from SPD left-wingers to halt or even reverse Schroeder’s reformist drive.
SPD party leader Franz Muentefering has appeased the left with his attack on financial investor "locusts" who chew up struggling firms and stirred a wide-ranging debate about market forces, but the left want words backed up by actions.
There are already signs that Schroeder could drop plans to cut the base rate of corporate tax to 19 percent from 25 percent, while extending the minimum wage to all sectors of the economy and legislating to tighten control on hedge funds.
By contrast, the CDU’s expected victory would strengthen the position of their national leader, Angela Merkel, the leading candidate to challenge Schroeder in 2006, when she could become Germany’s first female chancellor.
The large parties continued campaigning into the weekend in the state bordering the Netherlands and Belgium where more than one in five Germans live. Muentefering urged firms to respond to tax reforms by create jobs: "And that’s here, not somewhere else."
The SPD has run a campaign highlighting state premier Peer Steinbrueck, widely regarded as having won two televised debates against conservative challenger Juergen Ruettgers.
The CDU has stressed a need for change and pledged to cut coal subsidies in the state which would rate as the world’s 13th largest economy but where growth has trailed the German average.
Both have promoted ideas on education, a key local issue. The CDU wants more autonomy for universities, including the right to charge fees. The SPD say first degrees must be free.
