Scholz’s SPD Wins State Election Dominated by Energy Crisis

(Bloomberg) -- German Chancellor Olaf Scholz’s party won a state election in Lower Saxony, handing his Social Democrats a victory in the first electoral test since the standoff with Russia over the Ukraine war plunged Europe into an energy crisis.

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While Scholz can claim the result as a measure of support for his crisis management and a €200 billion energy-price relief package, the SPD’s share of the vote declined from the region’s last election five years ago to about 33.4%, according to preliminary official results Sunday.

Support for the Green party, Scholz’s biggest partner in the federal government, surged by almost 6 percentage points to 14.5%, setting up a likely SPD-Green government in the state that’s home to carmaker Volkswagen AG.

Scholz’s smallest coalition ally, the pro-business Free Democrats, dropped out of the state legislature after some 20 years after failing to garner the 5% of the vote required to win seats. The nationalist Alternative for Germany, or AfD, rose about 5 points to 10.9%. The opposition Christian Democratic Union slumped to 28.1%, its lowest in the state in six decades.

Lower Saxony is Germany’s biggest wind-power state, making it a central player in the government’s energy policy but also vulnerable to the economic effects of the energy crisis.

The result puts state premier Stephan Weil, a Scholz ally, on track for re-election to another five years in office. The SPD state premier has headed a coalition with the Christian Democrats for the past five years.

“This was a hard, uncomfortable election campaign,” Weil said Sunday after the first projection. “Voters have clearly given the SPD a mandate to govern.”

(Updates with Free Democrats dropping out in fourth paragraph.)

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