By Sarah Marsh
BERLIN (Reuters) -German Chancellor Olaf Scholz's faced the prospect of a more divided government after one of his coalition partners vowed to assert itself more strongly following a drubbing in a state election.
Scholz had little time to rejoice over his Social Democrats (SPD) winning the vote in the state of Lower Saxony on Sunday given the poor performance of the Free Democrats (FDP), who failed to reach the 5% threshold to enter parliament.
The pro-business, fiscally-hawish FDP, which has suffered a series of poor results in state elections this year, blamed in part its participation in the national administration.
The party, which is now polling 6%-8% at national level, down from the 11.5% it scored in the federal election last year, is not a natural ideological fit with the SPD and Greens, and their so-called "traffic light" coalition was unprecedented.
While the coalition is not expected to collapse any time soon, it could get more fractious, making it even harder for Scholz to lead the country through a European energy and cost-of-living crisis, and a stand-off with Russia over the war in Ukraine.
"The FDP's voice must become more pronounced in this coalition," General Secretary Bijan Djir-Sarai said. "We must prevent left-wing projects being implemented in this coalition."
Some political analysts expect the FDP, whose leader Christian Lindner runs the powerful finance ministry, will renew its focus on fiscal rectitude after some voters grew frustrated with its use of massive off-budget special funds to finance policy while getting around the country's debt brake in coming years.
A greater focus on fiscal responsibility could make it harder to make key upcoming funding decisions - such as over state demands for more help to finance public transport and house refugees.
The most immediate point of contention in the coalition is nuclear power amid fears of outages over the winter due to gas shortages.
The Greens-run economy ministry only wants to extend the lifespan of two of the three remaining active reactors until April. The FDP wants all three extended until 2024, and a further two plants reactivated.
CALLS FOR UNITY
On Monday, SPD and Greens leaders called on the coalition to remain united despite the parties' mixed fortunes in the Lower Saxony election and a slump in support for all three at national level.
"I can only urge each partner in the coalition not to work against one another but always to question whether the answers they are giving are the right ones," Rolf Muetzenich, chairman of the SPD parliamentary group, said.
The FDP would do better asserting itself positively with policy initiatives rather than shooting down those of their coalition partners, Philipp Koeker, political scientist at the University of Hanover, said.
Either way, it could not afford to leave the coalition at a time of national crisis, said Frank Decker, political scientist at the Rheinisch Friedrichs Wilhelms University in Bonn.
"If the FDP were to leave this coalition, it would go under at the next elections," he added, noting Scholz also did not have better coalition options as no one wanted a repeat of the grand coalition.
Many of the FDP's voters in Lower Saxony drifted towards Alternative for Germany, which nearly doubled its share of the vote.
That reflected a broader national surge in support for the far-right party due to frustrations with the government's response to the energy crisis and fears over the future as recession looms in Europe's largest economy.
SPD chief Lars Klingbeil said the government must decide quickly on how to calm soaring prices after proposals by an expert commission on Monday.
"People must feel they can rely on us," he said.