German politics: Eyes on North Rhine-Westphalia

A crucial state election may settle Chancellor Gerhard Schroder's future

IMAGINE you are a popular leader of one of the bigger European countries. What scenario might make your re-election all but impossible? Record unemployment of over 12%, and twice that in some of your strongholds, might do. Add in billions in public debt, lousy schools and rising crime - and even many of your most ardent supporters could stay at home or vote for the opposition.

This essentially describes the political predicament of Peer Steinbruck, the Social Democrat (SPD) premier of North Rhine-Westphalia, Germany's most populous state, which is holding elections on May 22nd. Yet last week, stumping in Herford, a city of 65,000 in the state's north-east, he did not come across as a loser. Yes, the state faces big problems, was his message, but we have better people and a programme to solve them. It was even delivered with a dose of self-deprecating wit. The crowd seemed to like what it heard.

A couple of hours later, and a mere stone's throw away, the Christian Democrat (CDU) challenger, Jurgen Ruttgers, had a harder time. Although his event organisers had arranged for rock music to greet the candidate, and party activists acted as cheerleaders, he did not connect with his audience. Instead of explaining what he would do differently, the former federal research minister stuck to lines that go down well, such as a promise to make sure that schoolchildren again learn how to read and write.

Mr Ruttgers is still likely to win, although a third of voters are undecided and recent polls have shown a narrowing gap between the CDU-Free Democrat opposition and the SPD-Green government. But whatever the outcome, it will shake up the political landscape, both in North Rhine-Westphalia and at federal level. In a way, this election is the German equivalent of France's referendum on the European Union constitution a week later.

The size of North Rhine-Westphalia means that it is more than just another regional election. NRW, as its citizens call it, has not only the biggest population (with 18m inhabitants), but also the EU's fifth-largest economy (ahead of the Netherlands, behind Spain). Moreover it is the heartland of the SPD, which has been in power there for almost four decades. Losing the state would be almost as historic an event as seeing the Christian Social Union, the CDU's sister party, kicked out in Bavaria, which it has governed since 1957.

The comparison with Bavaria is instructive on another level. The southern state has developed from a mostly agrarian economy into a high-tech hotbed in recent decades. But NRW has declined, mainly because of the collapse of heavy industry and mining. The number of coalminers in NRW has fallen from 500,000 in the early 1960s to 38,000 now. But SPD-led governments are also to blame. Although they built universities and attracted some new industries, they wasted a lot of money trying to put off or cushion inevitable structural changes.

Whichever candidate takes the helm in NRW will have his work cut out. Avoiding fiscal collapse, improving schools and, perhaps most important, changing people's habitual reliance on the state for help will all be big challenges. But change is sure to be slow, which may explain why Mr Ruttgers has been so hesitant over making far-reaching promises.

On the federal level in Berlin, though, the fallout from the vote will be felt far sooner. Angela Merkel, the CDU's chairman and opposition leader, can relax. It would now be bad news for her if Mr Ruttgers were to lose; but the ensuing ferment might also speed up the process of her being made the opposition candidate for chancellor. And she need not worry too much about the arrival of Mr Ruttgers, who is something of a softie on economic reform, as a new power to reckon with. For Ms Merkel has herself largely given up on the idea of running in next year's federal election on a radical reform agenda.

For the governing SPD-Green coalition, on the other hand, a defeat in NRW would be an unmitigated disaster - although thanks to the SPD's relative success in other recent state elections, it will still avoid the calamity of a two-thirds opposition majority in the upper house, the Bundesrat, which could have blocked almost all legislation, even the budget. But losing NRW will increase the pressure within the SPD to change course. The party's left wing - encouraged by remarks by Franz Müntefering, its chairman, who has criticised global capitalism and called international investors “locusts ” - -is sure to push for measures to water down Chancellor Gerhard Schroder's Agenda 2010 reforms, passed last year.

More significantly, a loss of NRW could mark the beginning of the end for the SPD-Green alliance. The two parties would have lost all centres of power except for the lower federal house, the Bundestag. Already, they are moving in different directions. Even as the SPD lurches back towards its Social-Democratic roots, the Greens seem tempted to sharpen their own profile, for instance over the arms embargo on China, which they want to keep, or over homeland-security measures.

But do not expect anything drastic to happen yet. Mr Schroder is unlikely to resign or form a grand coalition with the CDU, for instance. The SPD has no other credible candidate for chancellor and the CDU would not join a grand coalition under his leadership. More likely, Mr Schroder will move left, but not enough to endanger his reforms. Later this year, he may reshuffle his cabinet, replacing Hans Eichel, his finance minister - perhaps with Mr Steinbruck, if he needs a job.

Such political manoeuvring notwithstanding, a loss in NRW will leave Mr Schroder looking increasingly like a lame duck. But with Joschka Fischer, Germany's Green foreign minister, seriously weakened by the visa scandal, Mr Schroder will still be the coalition's only chance to hold on to power in 2006. And, as his supporters love to point out, he is always at his best with his back to the wall.