Angela Merkel setback as austerity agenda rejected in Germany’s biggest state

The rejection of her austerity economics at home will strengthen President
Hollande’s demand that the fiscal pact reached by all EU states with the
exception of Britain and the Czech Republic should be redrafted to allow
more room for higher spending centre-Left policies.

The Berlin meeting, taking place just hours after the Paris inauguration of
France’s first Socialist president for two decades, will be tense as Mr
Hollande demands a rethink of policies closely associated with Mrs Merkel
and Germany.

Benoit Hamon, the French Socialist Party spokesman, directly challenged the
German Chancellor’s authority to lead the eurozone.

“We didn’t vote for an EU president called Mrs Merkel who makes sovereign
decisions for the rest of us,” he said. “We want to renegotiate
this pact. Austerity led Greece into failure.”

North Rhine-Westphalia or “NRW” is Germany’s most populous state,
with a large share of the German economy – the largest on the continent –
and a history of setting trends in national politics.

Norbert Roettgen, Germany’s environment minister and a protégé of Mrs Merkel
nicknamed “Mummy’s brightest”, fought a clumsy Christian Democrat
campaign on the issue of fiscal responsibility versus high spending.

He even held his election rallies alongside a giant inflatable “debt
mountain” to emphasise the fiscal irresponsibility of the Social
Democrats.

“Do we have a thrift crisis in Europe or a debt crisis?,” he
demanded.

But he horrified the Chancellor by telling voters they would decide “whether
Merkel’s course in Europe is strengthened or whether it is weakened by the
re-election of a pro-debt government in Germany.”

Mrs Merkel has been forced to deny that the vote was a popular verdict on her
euro policy. “Sunday’s election is an important state election for
North Rhine-Westphalia, no more and no less,” she told Ruhr Nachrichten
newspaper.

Hannelore Kraft, the popular Social Democrat governor of North
Rhine-Westphalia, had triggered the early elections in order to get a
majority for an austerity-busting budget.

Her victory will help Social Democrats nationally after they last week delayed
Germany’s ratification of the “fiskalpakt” treaty in support of
the Socialist French President.

Mrs Kraft hailed the result as “an important sign for the federal
elections”, which take place in autumn next year and that will be
fought on the growth versus austerity issue.

In her campaign, she emphasised strengthening indebted local communities,
rather than cuts, urging extra investment in education and to attract
business.

The defeat follows the worst result in 50 years last Sunday for Christian
Democrats in regional elections in Schleswig-Holstein.

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