Germany: A Setback For Schröder

The Sept. 5 State Parliament elections in Germany's Saarland were a disaster for Chancellor Gerhard Schröder's Social Democratic Party (SPD). The Social Democrats' share of the vote in their onetime stronghold plummeted 13.6 percentage points, to 30.8%. But despite what the pundits are writing, the poll wasn't necessarily a popular outcry against economic reform. Yes, unemployed and working-class voters deserted the SPD ahead of cuts in jobless benefits. But the pro-reform Green Party and Free Democrats gained ground, while Christian Democratic Saarland Minister-President Peter Müller -- a noted reformer who has cut bureaucracy and streamlined public education -- expanded his majority in the state Parliament by winning 47.5% of the votes. As further elections approach in Brandenburg and Saxony on Sept. 19, the Saarland vote shows Germans may not be as fearful of change as some pols think.

Edited by Patricia Kranz

    Before it's here, it's on the Bloomberg Terminal.