February 7, 1999
Web posted at: 10:51 p.m. EST (0351 GMT)

FRANKFURT, Germany (CNN) -- German Chancellor Gerhard Schroeder's ruling coalition stumbled Sunday in its first electoral test since taking power last September, which could make it more difficult to push through planned tax and immigration reform measures.

In state elections in Hesse, a prosperous central state that includes the financial capital of Frankfurt, Schroeder's Social Democratic Party (SDP) and its Green Party allies were defeated by the conservative Christian Democrats (CDU) and its coalition partner, the Free Democrats.

Schroeder's ruling coalition also lost its outright majority in the upper house of the federal parliament, the Bundesrat, when it lost at least five seats in Hesse. While the more powerful lower house remains in SDP-Green hands, the opposition could use the upper house to thwart the government's plans on a variety of issues.

Hesse is the first of seven German states to hold elections this year, and control of the Bundesrat over the long term will turn on the results. As of now, neither the left nor right has clear control, though the SDP and Greens remain the largest block.

Schroeder declined to comment on the results.

Dual-citizenship plan a top issue

The key issue in the Hesse election was a controversial proposal by Schroeder's government to allow up to 4 million immigrants living in Germany to gain citizenship while still retaining citizenship in their homelands.

The CDU had collected a million signatures on a nationwide petition against the dual-citizenship plan -- a campaign that began in Hesse.

The conservatives had to defend themselves against charges that the petition drive was playing into the hands of Germany's anti-immigrant far right. Rather, they insisted immigrants should have to give up their previous citizenship before becoming German citizens.

"A lot of my friends are foreigners," said CDU leader Roland Koch. "The public doesn't like the plan to give 4 million foreigners German passports. They believe that will hinder the efforts to integrate the foreigners."

"For the SDP, the citizenship issue had a demotivating effect," said Dieter Roth, head of the polling firm Electoral Research Group. "Especially among the working class, the opposition to the citizenship reform was strong."

In Sunday's election for the Hesse legislature, the CDU took 43.4 percent, compared to 39.4 percent for the SDP, 7.2 percent for the Greens and 5.1 percent for the Free Democrats. While the SDP's total was actually up slightly from last year's ballot, the Greens plunged 4 percent.

The SDP and Greens had ruled Hesse in a coalition since 1991.

Reuters contributed to this report.

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