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Merkel pins "painful" defeat on nuclear worries

28 March 2011 20:30 (UTC +04:00)

Baku â€“ APA. Merkel’s party defeated in southwest state after 58 years, APA reports quoting â€œReutersâ€.
German Chancellor Angela Merkel said on Monday it would take her Christian Democrats a long time to overcome the pain of an election defeat in their conservative heartland where the Greens won on fears about nuclear power.
The environmentalist party is expected to take office in a coalition with the Social Democrats after the vote on Sunday in the prosperous southwestern region of Baden-Wuerttemberg, where Merkel’s party had ruled for nearly 60 years.
"It’s a deep wound in the history of Baden-Wuerttemberg and also in the history of the CDU," Merkel told reporters in Berlin on Monday. "The pain from this loss won’t go away in just one day. We’ll have to work for a long time to overcome the pain from this defeat."
She said, however, that she had no plans to reshuffle her cabinet or radically change her policy course in response to the defeat. Her Foreign Minister Guido Westerwelle, head of the increasingly unpopular Free Democrats (FDP), was peppered with questions about his future but said he would not step down.
Worries about nuclear power following Japan’s earthquake and tsunami dominated the campaign and mobilised votes for the anti-nuclear Greens, who are set to lead a state government in Germany for the first time.
Merkel, an advocate of nuclear power, reversed course after damage to the Fukushima plant in Japan sparked fears about radiation leaks, announcing plans temporarily to shutter the seven oldest nuclear plants in the country in a move some voters saw as a ploy to shore up support.
Merkel dismissed the critics on Monday, telling a news conference her views on the safety of nuclear power had changed since Japan.
"In view of the incident in Japan and the shape of things in Fukushima we simply can’t go back to business as usual," she said. Many conservatives in her party still want to extend the lifespans of nuclear reactors in Germany, but Merkel urged them to think again.
"It would be good for our party to draw new conclusions from the new events," she said. "Japan is a dramatic experience and we can’t just ignore that."
SHIFT FROM NUCLEAR POWER
The election result seems likely to accelerate a German shift away from nuclear power. Merkel’s energy minister said an exit would be speeded up. [ID:LDE72R0JT]
Shares in German renewable energy stocks such as SolarWorld (SWVG.DE), Q-Cells (QCEG.DE), SMA Solar (S92G.DE) and Nordex (NDXG.DE) surged and Deutsche Bank predicted the vote could lead to a "radical re-ordering of Germany’s nuclear energy policy". [ID:nLDE72R077]
The euro currency was also affected by the vote as investors pushed it down in a bet that a weakened Merkel would have less political leeway to shore up financially stricken members of the single currency bloc. [ID:nLDE72R13J]
"The hypothetical risk that parts of the CDU/CSU (its sister party) and FDP may rebel against Merkel’s pro-euro policies remains the most potent risk to our positive outlook for the euro debt crisis," said Berenberg analyst Holger Schmieding.
Goldman Sachs economist Dirk Schumacher said the election was unlikely to change Berlin’s position on euro bailouts, because, although these were unpopular with centre-right voters, this had played virtually no role in the Baden-Wuerttemberg election.
Merkel, who will not face a federal election until 2013, is expected to weather the defeat without a challenge to her leadership, in part because she has no major rivals left within her party. [ID:nLDE72Q0LE]
Changes could be looming for the FDP, which barely scraped into the assembly in Baden-Wuerttemberg and has seen support plummet since a strong performance in the 2009 federal vote.
A weak FDP is bad for Merkel as her party needs its smaller partner to form governments at both the federal and state level.
Westerwelle is widely blamed for the FDP’s decline and is likely to face renewed pressure to go after fighting off a challenge by some party members last year.