Fortune Sky is Your Go-to Source for the Latest Finance News, Covering Markets, Business, Industries and Internet.
⎯ 《 Fortune • Sky 》

Scholz Braced for Setbacks in Bavaria and Hesse: What to Watch

2023-10-07 14:28
German Chancellor Olaf Scholz and his coalition partners are bracing for punishment in two regional elections on Sunday
Scholz Braced for Setbacks in Bavaria and Hesse: What to Watch

German Chancellor Olaf Scholz and his coalition partners are bracing for punishment in two regional elections on Sunday as rising discontent about immigration and a stagnant economy weigh on their support.

The conservative Christian Democrats and their Christian Social Union sister party are seen comfortably retaining power in Hesse and Bavaria respectively, while the far-right Alternative for Germany could take second place in at least one of the two western states.

Here are some of the main issues to watch:

Scholz Dilemma

Scholz’s three-way alliance of his Social Democrats, the Greens and Free Democrats was always going to fractious, but their persistent public bickering has damaged their standing with voters and buoyed rivals. The question is how poor performances in the two elections will affect the dynamics in Berlin.

Part of Scholz’s strategy for dealing with Germany’s current malaise has been to talk up the nation’s strengths — such as its manufacturing prowess and leading role in the expansion of renewable energy — while dismissing evocations of Europe’s biggest economy as the “sick man” of the continent.

Read More: Germany Is Becoming a Roadblock for More and More EU Business

His interior minister, Nancy Faeser, is the lead SPD candidate in Hesse and a disappointing showing would reflect badly on both her and Scholz and could compromise the government’s efforts to get Germany back on track. The CDU/CSU bloc is the main opposition force at the federal level and strong results in the state votes could provide fresh impetus to their attacks on the chancellor.

At the same time, the FDP is in danger of missing the 5% threshold to get into parliament in both regions. If the worst case scenario comes to pass, that could force the party and its leader, Finance Minister Christian Lindner, into a stronger effort to raise its profile at the expense of its partners.

Far-Right Surge

The anti-immigrant AfD has been the main beneficiary of the ruling coalition’s dysfunction, surging into second place in national polls.

The party is much more successful in the former communist eastern states, where it’s the strongest force on around 30%, but is just behind the Greens and SPD in Hesse and hard on the heels of the Free Voters in Bavaria — the CSU’s current coalition partner. However, it won’t get a share of power as all mainstream parties have ruled out cooperating with the AfD at any level of government.

That will likely still be the case after next fall’s elections in the eastern regions of Saxony, Brandenburg and Thuringia, but a better-than-expected showing in Hesse and Bavaria may increase the volume of their demands for a seat at the governing table.

Controversy in Bavaria

The run-up to the Bavaria vote was overshadowed by an antisemitism scandal around the Free Voters party and its leader Hubert Aiwanger, the deputy to State Premier and CSU Chairman Markus Soeder.

Soeder decided there were insufficient grounds to dismiss Aiwanger even after he was linked to a flier from the 1980s that made light of the holocaust.

Their performance on Sunday will be closely watched but the controversy doesn’t seem to have damaged the party’s standing among voters. It’s expected to increase its share of the vote to 15%, from 11.6% in 2018, according a poll for public broadcaster ZDF published Thursday.

Migration

Migration has dominated the news flow in Germany in recent weeks, prompting Scholz to declare that his government will ensure it deals with the refugee situation. Many voters appear unconvinced and the state votes are likely to confirm widespread skepticism and prompt intensified political engagement with the issue.

“We will always work against a loss of control, because that’s not good for a state or a democracy,” Scholz said at a town hall meeting in Hamburg last weekend. He promised that undocumented migrants will be sent back to their home countries more quickly.

After the two state votes, there will be a short window when the government and opposition parties could seek a joint solution on migration before campaigning kicks in for the three state elections in eastern Germany.

In a poll for public broadcaster ARD published at the end of last month, 67% of respondents said that the admission of immigrants was currently either “rather not” or “definitely not” manageable. Almost half of the 1,326 people polled said they were concerned that too many foreigners are coming.

--With assistance from Chris Reiter.