By Dave Graham
WUPPERTAL, Germany (Reuters) - Wuppertal's theatre was a beacon of hope for a new age of creativity when built in West Germany's post-war boom. Today it is in trouble, a symbol of the bankruptcy threatening cities in Germany's biggest state.
North Rhine-Westphalia (NRW), home to more than one in five Germans, holds a state election on May 9 which is increasingly overshadowed by debt worries that could create serious problems for Chancellor Angela Merkel's centre-right government.
Merkel's coalition of Christian Democrats (CDU) and pro-business Free Democrats (FDP) must hold NRW to retain the majority in the Bundesrat (upper house of parliament) they need to carry out planned tax cuts and health service reforms.
However, with towns and cities forming the backbone of its industrial heartland sinking deeper and deeper into the red, voters and lawmakers on both sides of the political divide say Germany has all but exhausted room to manoeuvre fiscally.
"We're only looking at the tip of the iceberg," said Gerd Langguth, a political scientist at Bonn University. "Behind municipal finances is the whole question of federal policy."
Growing discontent about west German financial aid to former East Germany, population decline and Europe's economic woes have fed political disillusionment that could hobble Merkel's government and deepen splits between Berlin and the regions.
Wuppertal and North Rhine-Westphalia as a whole have traditionally backed the opposition Social Democrats (SPD).
Thanks to a big drop in SPD support in 2005, the city for the first time returned only CDU deputies to the state parliament, making it an important battleground.
Famed for a 110-year-old suspended monorail train and the mass production of drug Aspirin, Wuppertal was home to German choreographer Pina Bausch, who made her name working in the city's opera house and its theatre, the Kleines Schauspielhaus.
When it opened in 1966, the theatre was the scene of a famous rallying cry for the arts delivered by writer Heinrich Boell, a Nobel prize winner whose works helped shape the collective conscience of post-war West Germany.
But due to mounting debts, the city council has proposed closing the building, prompting a mass protest by theatres across Germany last month and attacks from opposition politicians.
SHAME
Most polls show neither the governing coalition of CDU-FDP, nor a combination of the SPD and their chosen partners the Greens will muster enough votes to form a majority in NRW.
However, a weekend voter survey for the first time gave an SPD-Greens alliance just enough support to govern the state. A clear result may depend on whether the Left Party, a far-left grouping, clears the five percent hurdle to enter parliament.
If the CDU-FDP partnership cannot hold NRW, many new laws will need backing by opposition parties. That would slow down a legislative process that has been widely condemned as unwieldy since Merkel's second administration took office last autumn.
Recognising the importance of constituencies like Wuppertal, Merkel and NRW state premier Juergen Ruettgers will jointly kick off the final phase of the campaign in a rally there on May 5.
However, financial constraints mean politicians can offer voters scant relief, putting the onus on cash-strapped cities to raise charges on public services, eating into consumer spending.
A new law will force the federal government to consolidate budgets sharply from 2011, while NRW's state government itself has to issue a record 27 billion euros of debt this year.
Underlining a growing split between the federal government and regional interests, both the SPD and CDU in the state accuse Berlin of eroding the tax base of municipal authorities while saddling them with more and more things to pay for.
So worried are Wuppertal and other NRW cities about their finances that 19 of them have forged a bipartisan initiative called "Raus aus den Schulden" ("Let's get out of debt)."
According to the initiative, Wuppertal's total debt level per capita was just under 1,600 euros in 2000. Over the past decade, the figure has more than tripled to some 5,300 euros.
The numbers are no mere abstraction on the city's streets.
Surrounded by discount stores in Wuppertal's pedestrian shopping area, 49-year-old Sabine McErlean said sorting out local finances was the most important issue in the NRW vote.
"I am ashamed of the mess this place is in. I can hardly bear showing it to my friends from southern Germany," she said.
SLIPPERY SLOPE
Wuppertal and other west German towns must continue contributing to the redevelopment of ex-East Germany until 2019, even though officials say the city may be insolvent by 2012 -- putting its finances in the hands of unelected bureaucrats.
Western resentment about the eastern "solidarity charge" has spilt over into the election campaign, giving Merkel a new headache as the 20th anniversary of German reunification nears.
"A city like Wuppertal can't be made to slip further and further into debt to pay the solidarity charge," said Peter Jung, Wuppertal's CDU mayor. "It's right to have solidarity among cities, but it cannot be about points of the compass."
Cities like Wuppertal, whose population has dipped to some 350,000 from over 400,000 in the 1960s, also struggle to maintain infrastructure designed for more people than it serves.
For now, said Christian von Treskow, artistic director of Wuppertal's theatre, cultural institutions are bearing the brunt of the cutbacks. This could prove "a slippery slope," he said.
"If Wuppertal falls, theatres will close nationwide," he said. "Schiller always said theatre was a moral institution. After World War Two it was: it forced us to confront the past. If we lose that, society may begin to decay too."
(Editing by Mark Heinrich)
