Another Crushing Regional Election Defeat For Merkel, As Ruling CDU Gets Record Low Vote

One of the recurring themes on Zero Hedge ever since the announcement of the EFSF is that in addition to onboarding contagion fears by transferring financial risk from the PIIGS to itself, Germany's ruling party, and particularly Frau Chancellor Merkel, has been on the receiving end of ever increasing popular anger at putting German wealth at risk in order to rescue lying, thieving countries like Greece and Italy, which have proven beyond a reasonable doubt, they will do none of the fiscal reforms demanded of them, yet promise the world in exchange for yet another bailout tranche, or more ECB-backstopped purchases of their debt (even Sean Corrigan would be proud of that sentence). Sure enough, today we get the latest confirmation that as national elections loom ever closer, as does the specter of a government crisis following the EFSF expansion vote some time in late September (it is fluid), the ruling CDU continues to take on water. Per Reuters: "Chancellor Angela Merkel's centre-right bloc suffered another defeat on Sunday in a regional election in Germany's poorest state, Mecklenburg-Vorpommern, with both her conservatives and their Free Democrat allies losing support. A first projection by the ARD network at 1615 GMT showed Merkel's Christian Democrats (CDU) falling to 24 percent from the 28.8 percent won in the sparsely populated state on the Baltic shore in 2006. It was the CDU's worst result ever there."

Despite Merkel's attempts to boost her appeal, the locals seem to no longer be as dumb as they are perceived:

The poor results in Mecklenburg-Vorpommern were a personal setback for Merkel, who campaigned heavily in the state of 1.6 million with nine appearances. Merkel's constituency in parliament is also located in Mecklenburg-Vorpommern.

And even as the leaders slowly lose all control, the opposition continues to gain:

The euro zone crisis loomed over the campaign ahead of a key vote in the Berlin parliament on euro zone bailout reforms in late September.

It has been a dreary year for Merkel. Two years before the next scheduled federal election, the CDU is also slumping in national polls -- in part due to general discontent over Merkel and over her hesitant leadership during the euro zone crisis.

The CDU and FDP have suffered a string of bitter setbacks in six state elections this year. The CDU lost control of two states -- Hamburg and Baden-Wuerttemberg -- it had long ruled.

The Social Democrats (SPD), which has ruled with the CDU in Mecklenburg-Vorpommer since 2006, rose to 36.8 percent from 30.2 percent. The SPD could continue the coalition with the CDU or switch to the Left party, which won 17 percent, or the Greens, which won seats in the state for the first time ever with 8.4 percent.

"We'll decide here what's best for the state," said SPD state premier Erwin Sellering when asked which of the three possible coalition partners he would pick. The SPD is in opposition in Berlin.

The far-right NPD also appeared to have won seats in the state assembly with 5.5 percent, just clearing the five percent hurdle, after they won 7.3 percent in 2006.

"There was an incredible smear campaign against us," NPD leader Udo Pastoers said in an ARD TV interview.

The poor results in Mecklenburg-Vorpommern were a personal setback for Merkel, who campaigned heavily in the state of 1.6 million with nine appearances. Merkel's constituency in parliament is also located in Mecklenburg-Vorpommern.

Yet another election defeat for the CDU will heighten nervousness among backbenchers in the Berlin parliament worried about their job security. Merkel's coalition faces a difficult vote on the euro zone bailout on Sept. 29 and there are already fears that not enough coalition deputies will back Merkel.

The Greens, riding high in national polls in the wake of the Japanese nuclear disaster, cleared the five percent hurdle in the state for the first time and now have seats in all 16 German states.

Naturally, none of this should come as a surprise: the trade off to imposing austerity and measures to fix the long-term viability will be a dramatic change in the political landscape. Yes, Merkel, Sarkozy, Berlusconi will all be gone in a cathartic sweep to remove the old system cancers, but the reality is that soon enough Europe will finally set off on the right path to long-term viability. 

Alas, that is much more than can be said about the US, which continues to dig in, and prepares to launch yet another idiotic episode of "easing" both monetary and fiscal, which will do nothing, but merely push the country ever closer to revolution.