Schroeder's party suffers big defeat in Bavaria poll

Chancellor Gerhard Schroeder's party suffered its worst election defeat in Bavaria since WWII yesterday, beaten in Germany's second most populous state by the conservatives for the 13th time in a row.

Schroeder's Social Democrats fell more than 10 points to 18.5 per cent in Bavaria, according to a television exit poll.

The exit poll by ARD television showed state premier Edmund Stoiber's Christian Social Union winning a landslide re-election victory with 62 per cent, gaining almost 10 points since the last ballot in the state in 1998.

The SPD's defeat, which follows heavy losses in state polls in Hesse and Lower Saxony in February, underlined Schroeder's weak standing nationally after three years of economic stagnation.

But it could also clear the way for negotiations with the conservative opposition at national level as the Chancellor attempts to steer an ambitious package of reforms through parliament this autumn.

The landslide represented sweet revenge for Stoiber exactly one year after Schroeder beat him by just 6,000 votes in the general election.

The victory reinforces Stoiber's standing as a conservative leader at the national level and will give the 61-year-old a role as kingmaker in anointing any challenger to Schroeder - and may even allow him to resume the mantle himself at the next elections due in 2006.

Schroeder will try to quickly put the drubbing behind him. He has repeatedly said that once the Bavarian election is out of the way, he expects cross-party talks to begin on his "Agenda 2010" package of welfare, health and pension reforms and a set of tax cuts he is counting on to kick start the economy.

The conservatives can block most of the measures through their control of the upper house of parliament or Bundesrat and talks were at a standstill in the run-up to the election. That conservative blockade is likely to be abandoned now.

With Bavaria's economy comfortably outperforming the country as a whole and unemployment well below the national average, Stoiber's camp saw no benefit in associating themselves with unpopular welfare cuts during the campaign.

Sluggish economic growth and over four million jobless have left voters seething. Schroeder's opposition to the US-led campaign in Iraq helped his SPD scrape back into power in last year's federal election.