Scholz's balancing act just got harder after German state election

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  • Scholz's SPD slumps to post-war low in NRW state vote
  • Conservative CDU comes first; Greens likely 'kingmakers'
  • Result ramps up pressure on Scholz over leadership style
  • But he takes long view, with coalition only five months old

May 16 (Reuters) - The worst post-war result for Chancellor Olaf Scholz's Social Democrats in a traditional party stronghold heaps pressure on him to show more decisive leadership over the Ukraine crisis and Germans' concerns about soaring costs of living.

Scholz's SPD lost a regional election in North Rhine-Westphalia (NRW), Germany's most populous state, to the conservative Christian Democrats (CDU) on Sunday - a setback for the chancellor after just five months in office. read more

The result reflected voter frustration with Scholz's cautious leadership, but the contrasting fortunes of his coalition allies will make it harder for him to respond by staking out strong positions.

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"Hammering for Chancellor Scholz," ran a headline in the mass-selling daily Bild.

After taking office last December following a domestically-focused campaign, Scholz pivoted to a more assertive foreign policy when the Ukraine crisis erupted, announcing a dramatic hike in military spending.

But Scholz was forced on the defensive earlier this month over criticism that Germany was failing to lead western efforts to supply Ukraine with heavy weapons to repel Russia's invasion. read more

His response was that he would rather be cautious than make hasty decisions, but the drubbing in a state that is home to more than a fifth of Germany's population, creates a new sense of urgency for the chancellor.

"Scholz will come under pressure to change tack," said Naz Masraff at political risk consultancy Eurasia.

While the Greens surged in the western state and the liberal Free Democrats (FDP) suffered a defeat their leader called "disastrous", both junior coalition partners have pressured Scholz to send Kiyv heavy weapons, looking to Ukraine policy to either capitalize on their momentum or to reverse their sagging fortunes.

His own Social Democrats, however, long advocated Western rapprochement with Russia and many in the party remain reticent about stepping up arms supplies to Ukraine now.

His party is sensitive, though, to voters' inflation concerns, which Scholz's government has failed to assuage despite a debt-fuelled spending spree.

Government sources say the softly spoken chancellor sees it as part of his role to hold together the heterogeneous coalition and that he is not much bothered by short-term dips in popularity. read more

"If you're bothered by headlines like that, you should be in another profession," Scholz told RTL television on Monday.

The regional election may have just made the task harder, even if SPD officials played down its significance.

"The cooperation within the ruling coalition is set to become more challenging," Masraff at Eurasia said of the government in Berlin.

The result meant Scholz "will increasingly face competition from (Greens) Vice-Chancellor Robert Habeck and CDU leader Friedrich Merz, who will position themselves as potential candidates for the chancellery in 2025 elections," she added.

LONG GAME

The SPD's loss in the state, which the centre-left party dominated for most of the past half century but lost to the CDU in 2017, marks its second electoral setback in a week, reflecting discontent with Scholz's national leadership.

The conservatives also won in the northern state of Schleswig-Holstein the previous weekend, a boost to the party of former Chancellor Angela Merkel, which lost in federal elections last year after 16 years in power. read more

Carsten Nickel at Teneo, a political risk consultancy, said it was early days, with the next federal election not due until 2025. "We need to see how this pans out," he said.

With no immediate threat, Scholz could afford playing the long game.

"Scholz is still trying to make a long term bet on finding the centre ground," Nickel said, noting that Germans were divided over his handling of the Ukraine crisis.

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Additional reporting by Thomas Escritt Writing by Paul Carrel Editing by Tomasz Janowski

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