–Adds Preliminary Official Result To Story Sent Sunday At 22:48 GMT

BERLIN (MNI) – German Chancellor Angela Merkel’s center-right
CDU/CSU-FDP government coalition lost further ground in the Bundesrat,
the upper house representing the 16 state governments, following its
election defeat in the city-state of Hamburg on Sunday.

According to preliminary official results, support for the CDU,
which previously governed Hamburg, was cut roughly in half to 21.9%. The
FDP mustered 6.6% of the vote.

The center-left SPD emerged as the clear winner of the Hamburg
elections with 48.3% of the vote. The environmental Green party got
11.2% and the post-communist Left party 6.4%. Over 5% of the vote went
to parties which were not able to muster the 5% minimum share of votes
to be represented in the state parliament.

The SPD will now be able to form a government on its own in
Hamburg.

Merkel’s coalition lost its majority in the Bundesrat last year
after an election defeat in North-Rhine Westphalia, Germany’s most
populous state. It currently controls only 34 out of 69 total seats and,
thus, already has to rely on the opposition to pass legislation.

The defeat in Hamburg will cost the Merkel camp another three seats
in the Bundesrat and will make it even harder for the government to get
its proposals approved. Most fiscal legislation requires the
ratification of both houses of parliament.

All opposition parties say they oppose plans by Merkel’s coalition
for possible further tax cuts in this legislature, which runs until
2013.

The strengthened position of the opposition in the Bundesrat is
seen easing the task of Finance Minister Wolfgang Schaeuble, never a big
fan of tax cuts, to slash the federal structural deficit by E10 billion
per year through 2016, as mandated by the constitution.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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