Merkel now has to prove her worth as crisis manager

German chancellor Angela Merkel paid the price for the Greek bailout on Sunday as her party took a beating in the state election in North Rhine-Westphalia.

Sunday was a fateful day for the German chancellor, Angela Merkel. In the federal state of North Rhine-Westphalia, her party, the Christian democratic CDU, was severely punished by voters. In Brussels, her finance minister, Wolfgang Schäuble, plagued by health problems, ended up in hospital just before a crisis meeting over the euro.

The chancellor is in trouble. At home, the political face-off that will inevitably follow the state election will devour most of her attention. In Europe, the euro's problems seem to become larger every day. Germany has to take the initiative, both financially and politically, but veteran politician Schäuble's poor health has left him poorly equipped for the task. Merkel has largely been left to her own devices. The time has come for her to prove her qualities as a crisis manager and show she can operate simultaneously on multiple fronts.

Money for Greece, not for Wuppertal

North Rhine-Westphalia, with nearly 18 million citizens, is the country's most populous state as well as its most productive. Home to the Rhine-Ruhr metropolitan region, it accounts for nearly a quarter of Germany’s GDP. But on Sunday it became the site of an electoral ground zero for Merkel. Everything that could go wrong did go wrong. A final decision over the Greek bailout was taken shortly before the state residents headed to the polls. While local issues were paramount, the election campaign also became a referendum over the unpopular Greek bailout and the preceding months of bickering in Merkel's cabinet. This state election was the first time Merkel's policies were put to a public test since the federal elections of last fall.

Many voters from impoverished cities like Wuppertal and Gelsenkirchen have a hard time understanding why Germany has lent Greece billions, while their own municipalities have no money to keep theatres or libraries open. Voters have clearly expressed dissatisfaction with the current political course. The governing coalition of Christian democrats and liberals – Merkel's coalition - has been voted out in North Rhine-Westphalia.

The liberals, represented by the FDP weren't the biggest losers however, Merkel's own CDU was. The sitting prime minister of the state, Christian democrat Jürgen Rüttgers, was, until very recently favoured to win. He has admitted to some mistakes, but will no doubt try to shift some of the blame to Merkel's federal government. As the polls closed and pundits began dissecting results, Merkel immediately became the target of growing criticism. On Monday, prominent party members were pushing for "changes" in the newspapers, a thinly veiled way of saying that the current course is untenable.

The loss of Christian democrats and liberals in North Rhine-Westphalia has caused the national coalition of CDU/CSU and FDP to lose its majority in the German senate, the Bundesrat. This spells more bad news for Merkel. The chancellor and her ministers will now have to bargain with the opposition over every possible cabinet decision. That won't be easy on controversial issues such as tax reductions, extending the life-span of nuclear plants and individual government subsidies on health insurance. In Berlin, it is common wisdom that the chance of rapid agreement on these matters has been reduced to zero.

Surprise win for socialists

The CDU garnered 34.6 percent of all votes in North Rhine Westphalia, some 10 percent less than it did in 2005. The liberal FDP won a few votes, obtaining 6.7 percent. In a surprise upset, the social-democratic SPD has become almost as large as the CDU by winning 34.5 percent of all votes. In the polls, the SPD had done poorly, but a record low turnout of less than 60 percent played to their advantage.

The Greens established themselves as a force to be reckoned with. Issues such as environmental policy and improving education played well with voters and resulted in 12.1 percent of all votes, 5.9 more than in the last election. Left-wing Die Linke (The Left) passed the electoral threshold by winning 5.6 percent of all votes and will be seated in North Rhine-Westphalia's parliament for the first time. Die Linke has become a significant political force now that it has won seats in 13 of Germany's 16 state parliaments.

How to form a governing coalition in the state remains a puzzle to be solved. On paper, many combinations are possible, but all would require compromise and, therefore, time. The election results in North Rhine-Westphalia confirm a nationwide German trend: the traditional four-party system, which long resulted in coalitions of Christian democrats and liberals alternating with those of social democrats and Greens, is done for. As the major parties slowly lose ground and parties like Die Linke step in to fill the gap, new coalitions will become necessary.

For chancellor Merkel, a new and uncertain era dawns. She can hardly ignore the message sent by this important state's electorate. She will become the target of increased pressure and will have to change policies and prove she can operate decisively. Her opponents are waiting in the wings to begin ousting her. But Merkel is a survivor. "Sitting out problems," as her predecessor Helmut Kohl called it, is her specialty.