Financial Times - September 6, 1999
Schröder's party suffers state election losses By Ralph Atkins in Berlin
Gerhard Schröder, German chancellor, was dealt a severe blow last night after sharp losses in state elections in Brandenburg and Saarland reduced further his administration's influence over the Bundesrat, or second chamber of parliament.
The poor results - which, according to exit polls and first results, would also see the extreme rightwing Deutsche Volksunion entering the Brandenburg state parliament for the first time - could hamper Mr Schröder's ability to push through planned financial reforms.
The chancellor will now have to rely on winning support in the Bundesrat, which represents the Länder, or states, from the main, centre-right opposition parties.
Last night a chastened Mr Schröder said he was "saddened and disappointed" by the results but that did not mean he lacked the "will to fight" for his programme.
In Saarland, final results showed the SPD's vote down from 49.4 to 44.4 per cent, putting it below the the CDU, which will take over the state's government.
Mr Schröder's Social Democratic party saw its vote in Brandenburg plunge from 54.1 per cent to around 40 per cent, on early results. That will cost the party its absolute majority in the state parliament.
The SPD may now form a "grand coalition" with the centre-right Christian Democratic Union. But last night Manfred Stolpe, the SPD's prime minister in Brandenburg, did not rule out an alliance with the Party of Democratic Socialism, the successor to East Germany's Communist party.
The CDU scored about 26 per cent (up 7 percentage points from last time) and the PDS about 24 per cent (up 5 points) in Brandenburg, early results showed. The Deutsche Volksunion won just over 5 per cent.
In Saarland, the relatively modest loss compared with Brandenburg offered little comfort for Mr Schröder: Reinhard Klimmt, Saarland's prime minister, was close to Oscar Lafontaine, Mr Schröder's leftwing ex-finance minister, who resigned earlier this year. Mr Klimmt had persistently criticised the chancellor - particularly his plans to link state pensions to prices rather than wages for the next two years.
The results - the first two of four state elections this month - follow a wretched summer of internal wrangling within the SPD over Mr Schröder's plans to cut federal spending by DM30bn (£10bn) next year. Despite taking over the party chairmanship himself, Mr Schröder has failed to stem resistance from within SPD ranks to his "modernising" politics developed partly in conjunction with Tony Blair, the prime minister.
Since February's state poll in Hesse, where the SPD also lost control, Mr Schröder's federal coalition of Social Democrats and the Green party has had no majority in the Bundesrat. Together Brandenburg and Saarland have seven votes out of 69 in the second chamber.