Germany: Germany is facing an early general election after chancellor Gerhard Schröder's Social Democrats (SPD) lost power in the state of North-Rhine Westphalia after 39 years.
The decision to bring forward the election by 12 months unleashed a political earthquake in Berlin yesterday and stole the thunder from the CDU after its historic victory.
"With the bitter election result for my party in North-Rhine Westphalia, the political foundation for our work has been put into question," said Mr Schröder to journalists in Berlin. "In order for the continuation of reforms I consider necessary, the support of the majority of the people is indispensable."
A formal announcement on the early election is expected tomorrow, but CDU leader Dr Angela Merkel appeared to accept the challenge thrown down by the government last night.
"If the SPD thinks there is a need for early elections then I can only say that every day SPD-Green is not governing is a good day for Germany," said Dr Merkel, looking exhausted but euphoric. "We're ready for elections. The voters have placed their trust in us . . ."
The decisive CDU victory over the SPD in North-Rhine Westphalia, polling 45 to 37 per cent in exit polls, has all but guaranteed that, after standing aside last time around, Dr Merkel will face off against Mr Schröder in the upcoming election campaign.
Bavarian premier Edmund Stoiber, Mr Schröder's challenger in 2002, said: "The fall of the last red-green state government signals the end of the red-green at federal level."
German president Horst Köhler will begin discussions this morning about whether the constitution allows for an early dissolution of parliament as called for by Mr Schröder.
The last time a similar situation arose was in 1982 when Helmut Kohl forced a vote of no confidence in then chancellor Helmut Schmidt, was elected chancellor and called a general election to legitimise his new government.
North-Rhine Westphalia was the SPD's 11th state election defeat in a row since its narrow general election victory in 2002. But that the loss of the party's stronghold has brought a premature end to the SPD-Green Party second term caused huge surprise in Berlin.
The CDU takeover in the state seals conservative control over the upper house, the Bundesrat, a situation which has already forced the SPD into several uncomfortable compromises with the opposition, and subsequent election beatings as a result.
"Now it's time to clear up the relations in Germany," said SPD leader Franz Münterfering, announcing the plan for a snap election just 20 minutes after the polls closed. "We Social Democrats don't fall to our knees on an evening like this. We are convinced that we are on the right and correct path and that we want Gerhard Schröder to remain chancellor."
Exit polls last night showed the scale of the SPD defeat, its worst election result in the state for 50 years, as traditional working class voters stayed away in anger at painful social economic reforms that have so far failed to cut 13 per cent state unemployment. Voters trusted the CDU in all crucial competences, from education to the economy and social affairs. The percentage of voters saying they were financially worse off in the state had leapt from 15 per cent five years ago to 55 per cent today.
The SPD's hoped-for last minute surge of undecided voters never materialised and voters appeared unimpressed by the SPD's "capitalism critique" comparing managers of multinational companies to a biblical swarm of locusts on national economies.
The SPD had ordered 60 bottles of champagne and booked Düsseldorf's Apollo Theatre for their election party, but the atmosphere there was more tragedy than comedy last night.
16 states in one: Germany's federal system
Germany's federal system is one of the founding principles of the postwar constitution. Yesterday's election defeat for the Social Democrats (SPD) turned that federal principle against Chancellor Schröder and is likely to lead to autumn elections.
Germany has 16 federal states or Länder, from Schleswig-Holstein bordering on Denmark in the north, to Bavaria bordering Austria in the south. Each state has its own capital, constitution, Landtag (state parliament) and government, deciding on matters such as education and culture.
The federal government in Berlin has responsibility for major foreign, social and fiscal policy, with the backing of its majority in the lower house, the Bundestag. But around 40 per cent of German laws require the backing of the Bundesrat, the upper house representing the federal states, long controlled by the Christian Democrats (CDU).
The CDU has used its majority in the Bundesrat to wring tough compromises from Chancellor Schröder's government, giving recent social reforms a decidedly more conservative contour.
Yesterday's announcement of an early election was an expression of government frustration with the status quo. SPD leader Franz Münterfering said it was time to end the situation where the government is blamed solely by voters for laws which, out of political necessity, are a conservative-tinted compromise with the CDU.
The North-Rhine Westphalia ballot was always going to have greater political consequences than elections in smaller states. But the Bavarian leader Edmund Stoiber was not overstating it when he said last night that yesterday's election has "unleashed a political earthquake" across Germany.