Merz Conservatives Face Stiff Test in One-Time German Stronghold

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(Bloomberg) — Chancellor Friedrich Merz’s conservatives are facing an unexpected challenge in their bid to wrest back power in a wealthy southwestern region from the Greens, the first in a series of state electoral tests for the German leader this year. 

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Merz’s Christian Democratic Union was the heavy favorite to beat the environmental party into second place in Baden-Wuerttemberg in the months leading up to Sunday’s vote, with ambitions to take back the reins of government after 15 years. 

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But the CDU, once dominant in the home of the Black Forest and carmakers Mercedes-Benz Group AG and Porsche AG, has watched its poll lead all but evaporate amid local gaffes and Merz’s broader struggle to gain traction nationally. A loss in the region would deal a heavy blow to a chancellor who has seen his support tank since taking the top job 10 months ago. 

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The chancellor has campaigned heavily in the state, seeking to rally voters with a message that his party is the reliable steward of the world’s No. 3 economy at a time of geopolitical turmoil. At a Feb. 20 party conference in Stuttgart, the state’s capital, he called the center-right party the “DNA of this republic.” 

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Merz’s record on the economy, which is emerging from years of stagnation, will swing into focus in Baden-Wuerttemberg, a region of 11 million whose manufacturing base has been hit by industrial transformation and technological disruption. Output there contracted more sharply than in Germany as a whole, with insolvencies at their highest level since the global financial crisis in 2008. 

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Layoffs dominate local headlines. Auto supplier Robert Bosch GmbH plans to cut some 10,000 jobs in Baden-Wuerttemberg and close or scale back plants as it shifts production to China. Porsche, whose iconic crest mirrors the state’s coat of arms, is shedding nearly 4,000 positions, among cuts taking place across the car industry. 

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Unemployment in the state remained at 4.8% last month, buoyed by geopolitical tension, including trade policy. The state economy minister, Nicole Hoffmeister-Kraut, a CDU member, said Feb. 27 that there was “no sign of a comprehensive recovery.” 

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“People need security, not fear of the next wave of layoffs,” said Barbara Resch, head of labor union IG Metall in Baden-Wuerttemberg, urging the next state government to cut energy costs, streamline bureaucracy and invest in infrastructure to protect jobs.

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The Greens pulled even with the CDU at 28% apiece, according to a poll Thursday from broadcaster ZDF. Other polls had the conservatives with a narrow lead. The far-right Alternative for Germany registered at 18%, almost doubling its support from five years ago. The Social Democrats, which govern nationally with Merz, had 8% support in the state, the ZDF survey showed. 

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The narrowing poll gap for Merz’s party is also down to local politics. The CDU candidate, 37-year-old state lawmaker Manuel Hagel, drew attention last month with a resurfaced video in which he can be seen describing a 2018 school visit, including an encounter with a girl with “brown hair, doe-like brown eyes.”