Merkel's CDU routed in Hamburg state election

HAMBURG (Reuters) - Chancellor Angela Merkel's Christian Democrats suffered a crushing defeat in a regional election in the northern German city-state of Hamburg on Sunday that will make it harder for her coalition to pass laws.

The rout, the party's worst post-war result, will cost the CDU three seats in the upper house, or Bundesrat.

The unexpectedly large scope of the defeat may cause turbulence for Merkel and her conservatives at the national level with six further regional elections coming this year.

The CDU fell to 20.8 percent from 42.6 percent in the last election in 2008, according to an ARD TV projection. The drop of 21.8 points was the steepest decline ever between elections for the CDU and about five points worse than pollsters had forecast.

"It's an hour of helplessness for us," said the defeated CDU candidate for mayor in Hamburg, Christoph Ahlhaus.

The CDU was crushed because Ahlhaus was deeply unpopular and ran a poor campaign while the Social Democratic (SPD) candidate, highly regarded ex-Labour Minister Olaf Scholz, won back traditional SPD voters and moderates by making the economy and debt reduction the focus of his run in Germany's richest state.

"The CDU has suffered a heavy defeat," said CDU general secretary Hermann Groehe, Merkel's deputy party leader.

The opposition SPD won 49.8 percent of the vote, up from 34.1 percent in 2008, ARD public television said. The SPD was projected to win 64 seats in the Hamburg state assembly, three more than needed for an absolute majority.

It was the SPD's best result anywhere since 1994.

"It's an historic result not only for us but also for the others," said SPD chairman Sigmar Gabriel, referring to the CDU's record-breaking plunge. "It's an impressive result."

Hamburg is the first of seven state elections this year. The loss of three seats in the Bundesrat, which represents Germany's states, will make it harder for Merkel's CDU-Free Democrats coalition to pass federal legislation.

The Bundesrat has to approve about half of the legislation that passes through the Bundestag (lower house).

ANALYSTS SEE SHORT-TERM SPD GAIN

The drubbing in Hamburg, where Merkel was born, will also send a signal to voters before the other state votes, especially in the important southwestern region of Baden-Wuerttemberg where her CDU is also in danger of losing power in March.

Analysts believe the SPD nationally might get a short-term boost with its second consecutive state election victory, following a win in North Rhine-Westphalia last May. They said Merkel would now be forced to make more compromises with the SPD in Berlin.

"Merkel lost three Bundesrat seats but her position isn't in danger," said Gerd Langguth, a Bonn University political scientist. "It's the first election and the optical effect for the CDU is not good. They've got their work cut out for them."

Nils Diederich, political scientist at Berlin's Free University, said the upper house loss would hurt Merkel.

"The government will have an even tougher time getting laws through," he said. "Hamburg should be seen mainly as a regional result. They managed to win back an SPD stronghold."

Hamburg, long a left-wing bastion, was ruled by the SPD for 44 years before it lost power to Merkel's CDU 10 years ago. Scholz, 52, purged the party of corrupt officials who cost it control in 2001.

Karl-Rudolf Korte, a political analyst at Duisburg University, told ZDF television the SPD would count on Hamburg's result having a knock-on effect in other states and helping to mobilise its supporters.

"But I don't see it having an impact elsewhere," he said.

The lopsided defeat comes at a difficult time for Merkel. Popular Defence Minister Karl-Theodor zu Guttenberg has been embroiled in a plagiarism scandal over his academic thesis, allegations he has dismissed.

Bundesbank chief Axel Weber, seen as a key contender to lead the European Central Bank, ruled himself out of that job and said he would quit the German central bank, a decision that media interpreted as a blow to Merkel.

(Writing by Erik Kirschbaum and Annika Breidthardt; editing by Mark Trevelyan)