Surprising Loss For Merkel Coalition In Lower-Saxony Ahead Of German General Election

Tyler Durden's picture


In what is a surprising warning shot for Merkel's popularity ahead of the September general election in Germany, moments ago the CDU/FDP ruling coalition lost the vote in Lower Saxony to the center-left Social Democratic Party/Greens block by a last minute, one-seat win according to Reuters. The SPD and Greens won a combined 46.3 percent against 45.9 percent for the centre-right, with the FDP defying predictions they would fail to win a seat and scoring 9.9 percent - twice what they had been forecast to get, however the boost coming as a result of a CDU ballot-splitting strategy that may have now backfired.

Here is how Deutsche Bank described the significance of this regional election previously:

The outcome of the Lower Saxony election in Germany on 20 January could tell the market something about the popularity of the FDP party and the likelihood for a continuation of the CDU-FDP coalition at the Federal election later this year.


With the federal elections in September, the election in Lower Saxony ought to offer the market some insight into political support, in particular for the FDP/Liberals, the junior coalition partner to Merkel’s conservative CDU/CSU. On federal level, the Liberals have been faring badly in polls at or below the 5% threshold since March 2011. Unless they improve their lot or conservative voters tactically vote for the Liberals to ensure their representation in parliament, they might not enter the next Bundestag. An important milestone is the state election in late January in Lower Saxony, home state of the current Liberal party chairman and minister of the economy, Philipp Rösler. After months of trailing behind in the opinion polls. The currently governing centre-right coalition headed by David McAllister has been closing the gap. The odds are absolutely even - essentially because the FDP should be able to remain in parliament. In the case of a victory of a SPD/Green coalition led by Stephan Weil (SPD) a reshuffle in the leadership of the Liberal party is likely with long-serving (and excellent campaigner) Rainer Brüderle replacing Rösler as party leader.

Spiegel is already out with the post-mortem:

Chancellor Angela Merkel and her Social Democrat challenger in the September election, Peer Steinbrück, both wanted a boost from Sunday's state vote in Lower Saxony. But it was so close that neither got what they were hoping for. If anything, the result shows that despite Merkel's popularity, her bid for a third term could be a very tight race.


The election in Germany's fourth-largest state is being scrutinized for clues to the outcome of the September vote in which Merkel is bidding for a third term.


Whoever ends up as the winner when all the votes are counted in Lower Saxony, the main lesson is likely to be that the general election could be a very tight race indeed, despite Merkel's popularity.


The chancellor has won kudos for limiting the fallout of the euro crisis for German taxpayers, and many analysts have said she looks almost unbeatable. She is a shrewd tactician with a knack for sidelining rivals, and she makes up for her lack of charisma and oratory skills with a low-key pragmatism that appeals to many voters.


But the weakness of the FDP is her Achilles Heel, and Sunday's election made that clear even though the ailing party appeared to come back from the dead, scoring an impressive and far higher-than-expected result of more than 9 percent. That gain was attributed to the CDU governor of the state, half-Scot David McAllister, who tacitly encouraged his supporters to split their ballot to make sure the FDP would clear the 5-percent hurdle needed to remain in parliament -- a precondition for him remaining in office.


That strategy appears to have worked a little too well, because it came at the cost of a steep drop in the CDU's own vote to just over 36 percent, down some six percent from the last election. Some 101,000 CDU voters opted to vote for the FDP this time, polling institute Infratest dimap estimated.


"The center-right camp can't really be pleased, the chancellor will have registered how dangerous a ballot-splitting campaign can be for her and the center-right," the chief political correspondent of the ARD public broadcasting network, Ulrich Deppendorf, said in a commentary. "The general election may be more exciting than expected."

While the impact of one-time regional election should not be exaggerated, what is certain to make the September election far more exciting is if the ongoing strength in the EUR persists, as countrary to all central bank logic the ECB does everything it can to strengthen not weaken the European currency. The immediate result of this strategy is to make German exports even less competitive outside of Europe (inside it already prefunds all current account imbalances via Buba funded TARGET2 claims), pushing the trade balance lower, and pressuring GDP.

As a reminder, Germany already posted its first quarter of sub zero GDP, a development which many would have said was impossible as recently as 6 months ago. At this pace the German technical recession of two negative GDP quarters, is virtually assured.

And while the people have been quite patient with Merkel's European policies so far, the main reason for their stoicism is that Germany has explicitly benefited from the Periphery being constantly on the edge, from the relative weakness in the EURUSD over the past three years, and from the capital reallocation into the core. Ironically, the end of even the brief, illusory period of peak crisis in Europe will have one major loser - Germany, which as we have said ever since the summer of 2011 benefits the most from keeping the Eurozone one step away from the grave.

Should the unemployment rate spike, should German GDP take another turn for the worse, and should German wages decline, one can be certain that then, and only then, will the "general election be more exciting than expected."

With eight more months of excitement build up, in which many things can and certainly will go wrong - after all this is Europe - don't count any chickens yet.

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Sun, 01/20/2013 - 19:43 | 3171376 caimen garou
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Don't worry miss merkel if you loose your job i'm sure the potus will have a job for you on his staff.

Sun, 01/20/2013 - 19:48 | 3171386 Careless Whisper
Careless Whisper's picture

Klaus Meine. German. Songwriter. Vocalist. Wind Of Change. They Get It.

Sun, 01/20/2013 - 22:23 | 3171692 Richard Chesler
Richard Chesler's picture

Bankster puppets are generally not welcomed by the overall population. Except in Amerika. 


Mon, 01/21/2013 - 02:31 | 3172165 AldousHuxley
AldousHuxley's picture

Americans don't welcome banksters either....

They just don't know what the heck is going on except what's on TV.....some celebrity gossip.


Superbowl coming up...all banksters forgiven.

Mon, 01/21/2013 - 03:52 | 3172204 CompassionateFascist
CompassionateFascist's picture

"Politics" in Germany is as meaningless as "politics" in the US or anywhere else in the Judeosphere. It's all centrally-planned, mediated BS. 

Mon, 01/21/2013 - 07:55 | 3172300 GetZeeGold
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Does this mean the welfare checks are going to stop in Greece?

Sun, 01/20/2013 - 19:44 | 3171378 kliguy38
kliguy38's picture

Does it matter? The only surprise was they lost.......why wasn't the fix in....musta screwed up "adjusting" their Diebolds

Mon, 01/21/2013 - 02:09 | 3172125 Fips_OnTheSpot
Fips_OnTheSpot's picture

No machine-based voting/counting.


If you look at the detailed results, FDP didnt pass the 5% in almost any district for the direct votes. Dead Party walking..

Sun, 01/20/2013 - 19:44 | 3171379 kliguy38
kliguy38's picture

Does it matter? The only surprise was they lost.......why wasn't the fix in....musta screwed up "adjusting" their Diebolds

Sun, 01/20/2013 - 19:43 | 3171381 reload
reload's picture

Merkel made seven personal appearances during a hard campaign. This is a bel weather region - so to loose after investing heavily in the campaign will be a wake up call.

Sun, 01/20/2013 - 20:30 | 3171458 unrulian
unrulian's picture

that campaign would be the only thing hard around her

Sun, 01/20/2013 - 19:44 | 3171382 Rustysilver
Rustysilver's picture

Germany always fights on two fronts. This time it's France and Greece.

Sun, 01/20/2013 - 19:50 | 3171393 Smegley Wanxalot
Smegley Wanxalot's picture

Perish the thought, but whom didn't Merkel blow?

Sun, 01/20/2013 - 19:56 | 3171406 knukles
knukles's picture

Like kissing Timmah.

Jesus that's about as gross as the 7oo lb Samoan dude wiping his  ear wax pickings on you in the airplane

Sun, 01/20/2013 - 20:00 | 3171410 BlueCheeseBandit
BlueCheeseBandit's picture

EUR dead in 2013, bitchez!


Sun, 01/20/2013 - 20:10 | 3171422 The Reich
The Reich's picture

A choice between the devil and the deepblue sea.

Sun, 01/20/2013 - 20:14 | 3171427 magpie
magpie's picture

Why, this is truly a nothingburger.

It only means that the next German government will copy all of its western next door neighbours foibles.

Sun, 01/20/2013 - 20:42 | 3171504 CrashisOptimistic
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The ZH guys always seem to forget . . . when they get angry at her for caving time and time again on giving money to Greece . . . if she loses power in the upcoming election, the replacements are MORE inclined to give money to Greece and allow ECB purchase of sovereigns.

Hard though it may be to believe, Merkel is the conservative force in the whole thing.

Sun, 01/20/2013 - 20:51 | 3171528 magpie
magpie's picture

True, but nonetheless the Greeks and Spaniards better start learning about Cavalry Steinbrueck...

Sun, 01/20/2013 - 23:18 | 3171821 gatorengineer
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Sorry Crash....  The one worlders won....  The being financially responsible (cough cough) folks lost.  I suspect what is not being told is its a repeat of here.  People saw no real difference and the left did a better job of getting out.....

Sun, 01/20/2013 - 20:55 | 3171541 q99x2
q99x2's picture

The prayers are working.

Sun, 01/20/2013 - 21:35 | 3171619 From Germany Wi...
From Germany With Love's picture

As mentioned before... the rhetoric on Germany TV is starting to lay the groundwork for transfer union. Whether that will succeed is an open question.

Sun, 01/20/2013 - 22:48 | 3171748 AgAu_man
AgAu_man's picture

Which channels, Bayern1?

I'm thinking of Nena's "99 Luftballons"


Mon, 01/21/2013 - 08:15 | 3172316 Haus-Targaryen
Haus-Targaryen's picture

Um .... what stations are you watching?  


ARD und ZDF havn't been laying the ground work for a transfer Union, although I did just hear on Bayern5 that Bavarian government workers have to start working more hours per week for the same €€€.  


Makes me sad Germany selling its soul to the south to try and apologize for WWII.  The Anglo and Germanic countries are the only civilized ones on the continent.  

Sun, 01/20/2013 - 21:47 | 3171635 espirit
espirit's picture

la - da - dee - da

Somebody's about to be suicided.  Can't upset the apple cart of the NWO.

Sun, 01/20/2013 - 22:18 | 3171683 otto skorzeny
otto skorzeny's picture

when is the NSDAP going to start picking up some seats?

Sun, 01/20/2013 - 22:40 | 3171734 AgAu_man
AgAu_man's picture

LOL^3.  Good irony.  They've been mentally castrated for decades, so... not for quite a while.

Mon, 01/21/2013 - 03:58 | 3172213 CompassionateFascist
CompassionateFascist's picture

Yeah. Every time I see a picture of that bloated, oozing pustule Merk I think "from this. Oh my God...". When Spengler wrote Decline of the West, he was right on target. 

Sun, 01/20/2013 - 22:28 | 3171707 knowless
knowless's picture

i'll count my hens when i damn fucking well please.

Mon, 01/21/2013 - 02:47 | 3172175 waterdude
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Mon, 01/21/2013 - 03:56 | 3172207 Jack Sheet
Jack Sheet's picture

All of these incredibly incisive and deep-diving analyses ignore the percent voter turnout. In many cases you will find that the non-voters have the majority. For some reason the MSM also avoids the issue.

Mon, 01/21/2013 - 05:22 | 3172244 Jack Sheet
Jack Sheet's picture

non-voters: 49.6%, a clear majority

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