German Anti-Euro Party Sees Future at Stake in State Vote

Alternative for Germany, the party founded last year with the goal of breaking up the euro area, faces its own survival test in a regional election that’s a proxy contest with Chancellor Angela Merkel.

After winning parliamentary seats for the first time in European elections in May when anti-mainstream parties from Greece to the U.K. surged, Alternative for Germany is struggling for momentum. Polls in Saxony, the party’s national stronghold, suggest the chances of entering its first state legislature in Germany in the Aug. 31 vote are touch-and-go.

Ruled by Merkel’s Christian Democratic Union since German reunification in 1990, Saxony has car-building plants by Bayerische Motoren Werke AG, Volkswagen AG and Volkswagen’s Porsche brand that help make it the most prosperous state in the formerly communist east. To make inroads, Alternative for Germany is muting its anti-euro push and campaigning on topics such as education, families and fighting crime to lure voters disgruntled with Merkel’s shift toward the political center.

“It’s been said that this is a fateful election and while I don’t want to overrate it, it is just that in the end,” Frauke Petry, 39, the party’s lead candidate in Saxony, said in an interview in Leipzig on Aug. 18. “We have to succeed here because our chapters in the other states are relying on the momentum to make it, too.”

Failure to win seats in Saxony could lead to the party’s decline and remove an irritant for Merkel, who faces criticism within her Christian Democratic bloc for straying from conservative positions on economic and social policy.

Families, Gays

That’s a result of federal elections in 2013, which led Merkel to ally with the Social Democrats after Alternative for Germany won 4.7 percent of the national vote on its first try, while the pro-business Free Democrats, her second-term partner, dropped out of parliament.

Support in Saxony for the anti-euro party, known by its German acronym AfD, has fluctuated between 8 percent and 5 percent, the minimum needed to gain seats, in six polls since June. The party won 10.1 percent in the state in the European Parliament vote, compared with 7 percent Germany-wide.

Former CDU voters who back the AfD say Merkel’s party has abandoned positions such as the protection of families, spends too much time on matters such as gay rights and caved in to SPD demands to ease citizenship rules for foreigners, Petry said.

For its part, the AfD advocates more discipline in school, opposes “re-education measures” such as using government policy to empower women, rejects gender-neutral language and is against mandatory inclusion of handicapped children in schools.

“It’s above all the conservatives in the CDU who turn their backs,” Petry said.

CDU Dilemma

If Alternative for Germany enters the state legislature in Dresden, the CDU may face the question of allying with the anti-euro forces that Merkel has sought to freeze out of the national political debate.

While national CDU leaders reject cooperation and say the party panders to far-right voters, Saxony’s CDU Prime Minister Stanislaw Tillich refuses to rule out coalition talks if his Free Democratic coalition partner, whose support has slid to 3 percent in polls, fails to win seats.

Merkel sought to keep her distance in an interview on ARD television yesterday, saying “it’s up to state party chapters to decide which coalition partner to choose.”

Even so, the CDU remains dominant in Saxony, polling 40 percent in an Infratest survey published Aug. 21. The SPD, Merkel’s coalition partner at the national level, was at 14 percent, with the AfD at 7 percent and the Free Democrats at 3.5 percent, below the threshold for staying in the legislature.

Given the math, “you can never rule out” cooperation between the CDU and the AfD, said Manfred Guellner, head of the Berlin-based Forsa polling company. “I’m firmly convinced that the AfD will be voted into the state legislature because it taps into a right-wing potential.”

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