The German government's faltering efforts to put a more free-market face on its economy at a time of feeble growth and widespread unemployment came to a head yesterday, at the cost of a major electoral loss for Chancellor Gerhard Schroeder's Social Democrats, and possibly his job. Mr. Schroeder said he would seek new national elections this fall, a year early, after his ruling coalition of Social Democrats and Greens suffered a devastating defeat in the state of North Rhine-Westfalia to the opposition Christian Democrats. The election ended a nearly 40-year reign of the left-leaning parties in what is Germany's most populous region, and the result bolsters the position of the Christian Democrats and their allies in the upper house of parliament, the Suedeutsche Zeitung notes, making it easier for them to block legislation presented by the government. Mr. Schroeder said the election showed the shaky nature of any political support for his economic reform plans and that he must again seek "clear support from a majority of Germans. With many in his party demanding a shift to the left in a bid to win back core voters, he could face a bruising battle with his grassroots as he draws up the party's election platform, the Financial Times notes -- increasing the stakes in what Le Figaro calls "a double-or-nothing" bet.Since he came to power in 1997 -- in a wave of electoral power shifts that also swept through France and Britain -- Mr. Schroeder has tried to make a series of pro-business economic changes, much of which generated stiff resistance. His reforms have cut social welfare benefits, including unemployment compensation, but have not resulted in an improvement in Germany's dire unemployment picture, with more than 12% of the work force jobless, the New York Times notes. And like the center-right government of France, Mr. Schroeder's team has been drifting leftward to gain support. In the weeks leading up to the election, the Social Democratic party chairman made headlines across Europe criticizing companies for firing workers to earn higher profits and comparing venture capitalists and investment banks to "locusts" descending on a crop. A new election in four months could mean the resumption of economic reforms as soon as the autumn, the FT says, either by a freshly legitimized Mr. Schroeder or by a conservative-led government.
Although he trails in opinion polls, the call for new elections took the wind out of the Christian Democrats' sails yesterday, The Wall Street Journal says. The limited time for campaigning will likely force the opposition to nominate its relatively unpopular leader, Angela Merkel, to run against Mr. Schroeder, instead of taking the time to find someone more charismatic.