After the defeat in North Rhine-Westphalia (NRW), Chancellor Gerhard Schroeder called for new federal elections later this year, 12 months ahead of schedule.

The move is seen as a high-stakes gamble, aimed at catching Chancellor Schroeder’s conservative rivals off-guard and silencing left-wing dissenters within his own party.

But the strategy also involves enormous risks for the government, which has seen its ratings plunge as German unemployment surged to post-war highs.

“With the bitter election result for my party in North Rhine-Westphalia, the political support for our reforms to continue has been called into question,” Chancellor Schroeder told German television.

“I see it as my responsibility and duty as German Chancellor to persuade the President (Horst Koehler) … to call new elections for the Bundestag as quickly as possible, realistically by autumn 2005.”

Federal elections are held every four years for Germany’s lower house, the Bundestag, with the next one due at the end of 2006.

Early elections are possible only in exceptional circumstances, with the final decision resting with the German President.

Chancellor Schroeder could seek a vote of confidence as early as next month. Should he lose that vote, and the government can seek to lose it deliberately, President Koehler would have 21 days to decide whether to dissolve parliament.

His shock announcement followed news that voters in NRW had thrown the ruling Social Democrats (SDP) of the state government after 39 years in power.

Once an SPD stronghold dominated by the coal and steel industry, the region has fallen on hard times.
Unemployment in the state, which borders on the Netherlands and Belgium and where 20 percent of Germans live, recently pushed above the one million mark to a post-war high.

Voters have blamed the government’s controversial labour market reforms, which included jobless benefit cuts, for their woes.

The result strengthens the hand of opposition leader Angela Merkel, who now stands a good chance of running against Chancellor Schroeder in a bid to become Germany’s first woman chancellor.

It’s thought Chancellor Schroeder might be hoping to catch the opposition conservatives off-guard with his announcement. Despite Sunday’s convincing victory, they remain divided at the national level with Ms Merkel viewed as an uncharismatic leader.

Others saw it as a bid to silence left-wingers in the party who have been campaigning for a change in direction, including a rollback of government reforms and the introduction of new worker-friendly policies.