"We've Suffered A Crushing Defeat" Says Martin Schulz After Historic Merkel Victory In Today's NRW Election

At the start of February, a shocking poll revealed that Germany's Social Democrat, or SPD, party - under the new leadership of former Europarliament head Martin Schulz - had managed to overtake Angela Merkel's dominant CDU ahead of Germany's federal elections in the fall of 2017.  However, just three months later, "Schulz' fairytale turned into a nightmare for Germany’s SPD" as the party scored its worst ever result in today's election in Germany's most populous state, North Rhine-Westphalia (or NRW).

With its sprawling industrial region and support from workers, NRW had been an SPD stronghold for decades. The center-left party had ruled NRW for 46 of the last 51 years. The CDU only ruled in NRW for five years during that time, from 2005 to until 2010. In May 2005, the CDU managed to unseat the SPD in NRW, prompting a snap federal election that the conservatives won, granting Merkel her first term as chancellor.

The polls showed the SPD coming in second, garnering just above 30% of the vote in what was once its stronghold state, down over 7% from the last election in 2012. At the same time, the business-friendly Free Democratic Party (FDP), which is looking to re-enter the German parliament this fall, came in third in NRW, taking 12.7% of the vote. The anti-immigrant Alternative for Germany (AfD) will also enter North Rhine-Westphalia's parliament for the first time, picking up 7.3%.

The Green party, currently the junior coalition partner to the SPD, took a massive hit, dropping down to 6.3% . According to Deutsche Welle, the chances of the Left party clearing the 5 percent hurdle to enter the state parliament look grim, with the latest results showing the party at 4.8% .

Voter turnout was unexpectedly higher than four years prior, officials said, with 65.5% turning out to cast their ballots.

Predictably, the CDU was delighted by its crushing victory: "This is a great day for North Rhine-Westphalia," said the CDU's top candidate Armin Laschet, who will most likely become the next state premier. "We accomplished our two goals: defeating the SPD-Greens coalition and becoming the strongest party in the state.

But the big story was the collapse in the SPD, which has now suffered three defeats in Germany's "Super Election Year", prompting Deutsche Welle to ask if the "Schulz train has come to a stop." Following the results, NRW's state premier Hannelore Kraft stepped down as both the state leader and state SPD party chief. She said she took full responsibility for her party's defeat in Sunday's election.

"I gave it my best. I am convinced that for the past seven years, step by step, we have helped this state move forward," Kraft said in the state capital Düsseldorf. "This was a committed election, but it wasn’t enough... We couldn't gain the trust of voters," she added.

The disastrous result prompted Martin Shulz - the SPD's chancellor candidate looking to unseat Merkel in the national election in September - to state that  "This is a hard day for the SPD and for me personally. I hail from the state where we just suffered a crushing election defeat", much to the glee of his long-term nemesis Nigel  Farage.

 

The FT's Wolfgang Munchau was even more colorful:

A few months ago, everybody talked about the “Schulz effect” — the rise in the German Social Democrats’ poll ratings by about 10 percentage point after the party chose Martin Schulz as the challenger to Angela Merkel, the chancellor. Mr Schulz, a former president of the European Parliament, had a unique advantage: he was as well as known as Ms Merkel, but there were no fingerprints of his on any unpopular policies. By choosing an outsider, the SPD managed briefly to distance itself from the chancellor.

 

The fairytale turned into a nightmare on Sunday night, when the SPD lost the regional elections in North Rhine-Westphalia, Germany's largest state. Within a period of four months, the Schulz effect first stopped, then went in to reverse. The SPD is now back to square one.

 

This is the worst result the SPD has ever achieved in North Rhine-Westphalia. It is Mr Schulz’s home state and the SPD’s heartland. This time he cannot blame the local prime minister, as he did last week when the SPD lost the elections in Schleswig-Holstein. The regional premier, Hannelore Kraft, is considered to be one of the SPD’s most sure-footed politicians. This is the third successive state election defeat for the SPD since Mr Schulz became the party’s candidate for chancellor.

Back to Schulz, who after the crushing loss also said that "I haven't even been head of the SPD for 100 days, I'm not a magician."

The criticism piled on: Christian Leye, the Left party's top candidate in the state election, noted that: "The Schulz train derailed in North Rhine-Westphalia." Marcus Pretzell, the AfD's regional head in NRW celebrated what he called "a real punch to the nose" for Kraft and hailed the Green party's low result as well

Meanwhile, a win for Merkel's CDU in North Rhine-Westphalia will give serious momentum to Merkel and her party in the lead up to the German national election in September. The CDU already regained power in the Saarland state elections and ousted the SPD in the northern state of Schleswig-Holstein last week.

According to Deutsche Welle, the CDU appeared able to cash in on local anger over issues including "security, rising crime, education, immigration, relatively high unemployment and traffic jams."

So what are the broader implications for the upcoming German Federal Elections? Here is the FT's Munchau again:

There are still four months to go until the federal elections, which is a long time even by the standard of German politics. But it would now take a miracle for the SPD to turn this around once again. Mr Schulz would have to acquire a programme in a hurry. The new French president, Emmanuel Macron, built up his agenda over a period of years. No comparable work has taken place within the SPD. The rise in the poll ratings for the SPD was not a gift, but a short-term credit that has now expired.

 

The shift in German politics is so extreme — for now — that the CDU may end up being able to form a coalition with the liberal Free Democcrats and the Greens at federal level, leaving the SPD in opposition. In that case, expect a shift to right: continued fiscal discipline, no softening on Germany’s hard line on eurozone reform, and less readiness to engage with Mr Macron. Genuine eurozone reform will have to wait until the SPD is in power, with an explicit mandate to carry it out. That moment just receded further into the future.

In other words, the biggest losers are, once again, the Greeks.