(Bloomberg) -- On a recent sunny day in a spa town in eastern Germany, the smell of grilled bratwursts filled the air as several hundred locals milled near a stage adorned with blue banners while kids got their faces painted to look like clowns or animals.
It was like any other summer community event except for the line of well-equipped police, keeping about 150 protesters at bay.
With authorities ensuring the sides kept a safe distance on the market square of Bad Salzungen in Thuringia, the demonstrators shouted slogans like “Nazis out” to try to disrupt the campaign rally of the far-right Alternative for Germany, or AfD. Such standoffs have become routine in the country’s increasingly antagonistic political landscape.
The states of Thuringia and Saxony — both in the former communist east — will elect new regional governments on Sunday, and frustration is high. About half of the electorate is projected to cast their ballots for the AfD or a new fringe party co-founded in January by former Left Party lawmaker Sahra Wagenknecht.
A popular figure in eastern Germany where she was born, some of Wagenknecht’s policies overlap with the AfD’s, including curbing immigration and improving relations with Russia. She also wants to hike taxes on the wealthy. The combination represents an anti-establishment wave in Europe’s largest economy.
Chancellor Olaf Scholz’s ruling coalition is likely to end up the biggest loser, with polls showing combined support for the three parties below 15%. While the outcome could hold surprises with many voters undecided in the final days, the elections are likely to send a foreboding signal that Germany’s once-reliable political center has started to crumble in some parts of the country.
Just over 12 months before the next national election is due, the trends could be underscored by a Sept. 22 ballot in Brandenburg. Polls in the state that surrounds Berlin also show the AfD leading other parties, including Scholz’s Social Democrats and the conservative CDU.
A little over a week before the Saxony and Thuringia votes, a deadly knife attack in the western town of Solingen heightened tensions and underscored links between migration policy and security. A Syrian man who had avoided deportation was accused of carrying out the stabbings at a festival in an incident linked to the extremist Islamic State.
In a sign of the pressure to act, Germany on Friday announced that 28 Afghan nationals who had been convicted of crimes were sent back to their home country for the first time since the Taliban returned to power in August 2021.
Scholz vowed further steps, but asked for patience. “The topic of migration is a big wheel that needs to be turned,” he said in an interview with Spiegel magazine. “Change takes time.”
Standing in the crowd of AfD sympathizers in picturesque Bad Salzungen, Frank Ullrich epitomized the growing dissatisfaction with Germany’s mainstream. “The ruling parties are just bickering and serving their own interests,” the 69-year-old former police officer said. “They are finished, we need a renewal.”
Those kinds of attitudes are prevalent across much of former East Germany, but also can be found in the more affluent west, especially in regions where manufacturers and other big employers are struggling. With times uncertain, many voters are ready to back the AfD, a party that has been classified by Germany’s domestic intelligence agencies as right-wing extremist in both Thuringia and Saxony.
From the Covid-19 pandemic to Russia’s war in Ukraine, Germany has lurched from one crisis to another in recent years. Its economy is struggling to adapt to shifting global patterns of supply and demand, especially in terms of exports to China. Self-imposed budget austerity has strained resources, while the challenge of integrating illegal migrants and asylum seekers unsettles communities across the country.
The trends are more acute in eastern Germany, where the disruption that followed reunification more than 30 years ago is still evident. Average incomes are lower than in western states and towns like Bad Salzungen are dominated by older people, a consequence of an exodus of youth following the collapse of industries that couldn’t compete with western rivals.
A subsequent influx of investment projects has done little to brighten the mood. One in three chips produced in Europe today is “Made in Saxony.” BMW AG, Mercedes-Benz Group AG and Porsche AG have established production in the region, and Volkswagen AG is investing €1.2 billion ($1.3 billion) to transform a plant in Zwickau into its leading production facility for electric cars. But many of the well-paid jobs pass over locals and skepticism runs deep.
“We are also feeling the unrest in Germany, of course,” VW Chief Executive Officer Oliver Blume told Bloomberg following a tour of a Porsche facility in Schwarzenberg near the Czech border. “I strongly attribute this to the fact that many people lack a sense of direction and perspective.”
Instead of the “flourishing landscapes” promised by former Chancellor Helmut Kohl, people in the east suffered job losses and semi-abandoned towns. Dashed hopes have bred mistrust.
“The skepticism is always that if you do something in the East, it’s really only because the people there are supposed to be the guinea pigs,” said Thomas Knabel, who leads the chapter of the IG Metall union in the town in Saxony where VW’s EV factory is located.
The AfD and the new BSW — which stands for Bündnis (Alliance) Sahra Wagenknecht — are exploiting feelings of being left behind. Both are pro-Russia and depict themselves as peace advocates, accusing Scholz’s ruling coalition of prolonging hostilities in Ukraine at the expense of the needs of Germans.
“The AfD movement presents itself as ‘resistance’ to the policies of the so-called ‘old parties,’ which it accuses of destroying Germany,” said Florian Spissinger, a political scientist who researches the motivations of the party’s voters. “What’s often misunderstood as non-ideological protest is part of the right-wing self-portrayal.”
Founded in 2013 as a euroskeptic party before shifting more toward German nationalism, the AfD is projected to become the strongest force in Thuringia, which would be a first. The milestone would raise echoes of the Nazi’s rise to power, which gained early momentum in the region in the 1920s.
The AfD’s path to power though is unclear. Mainstream parties have vowed not to form partnerships with it, which could make Thuringia ungovernable. Saxony faces a similar outcome, with the AfD narrowly ahead of the Christian Democrats in the latest poll from INSA.
Björn Höcke, the controversial leader of the AfD’s chapter in Thuringia, is a key reason for its success — despite and in part because of provocations such as using forbidden Nazi-era slogans and calling the Holocaust memorial in Berlin a “monument of shame.”
During a speech in Bad Salzungen, the former school teacher spoke in front of a banner, reading “The East does it.” The implication was that the AfD aims to give the region its pride back. He promised incentives for young families and also veered into conspiracy theories claiming Covid was invented by “globalists” to get rich and that “cartel parties” want to replace Germans with workers from Africa.
After listening to Höcke’s fiery rhetoric, Elli Zentgraf is torn. The 42-year-old social education worker says she shares the impression that the coming years will be harder for many people and is looking for answers. “But on the other hand, I know that less migration and more babies isn’t the answer,” she said. “I mean seriously, you can’t force women to have more kids.”
Some AfD officials seem uncomfortable with Höcke’s approach, but not necessarily his impact. “With all due respect for what’s happening, Björn Höcke isn’t the center of the party,” said Carsten Hütter, a member of the AfD’s national leadership committee and a state lawmaker in Saxony. “I don’t always agree with him either. But you have to recognize his successes in Thuringia.”
Hütter also downplayed the party’s stance on so-called remigration, saying the approach to carrying out court-ordered deportations is in line with the policy of the center-right Christian Democratic Union. “To speak for Saxony, we are saying quite clearly that the people who are integrated, law-abiding and employed here ultimately have a very clear right to live here,” he said. “It would be a folly to even try to change that.”
That kind of ambiguity is aimed at defusing criticism and sowing doubt in allegations of extremism, according to Hans Vorländer, a political science professor at Dresden University of Technology and director of the Center for the Study of Constitutionalism and Democracy.
“The AfD party platform looks relatively harmless at first glance, but a closer reading reveals the party’s seriousness and danger,” and the BSW is similar, he said. If Höcke ends up as the premier of Thuringia with the support of Wagenknecht’s party — a possibility that hasn’t been completely ruled out — “we have a problem, a big one.”
Some parts of the AfD’s official platform are designed to appeal to businesses like less state intervention and lower taxes. Then there are ideas that undermine Germany’s export-oriented economy such as leaving the euro, opposing free-trade agreements and restricting immigration of skilled foreign workers.
In Thuringia and Saxony, policy issues mix with feelings of being ignored by Berlin, “and that’s a burning issue,” said Matthias Diermeier, a managing director at the German Economic Institute, a think tank based in Cologne.
With the mainstream parties struggling to articulate solutions to the country’s challenges, it’s people like Michelle Schmidt who are pushing back against the drift toward right-wing nationalism.
“I’m really scared the AfD might come to power one day,” the 27-year-old office worker said, joining the chorus of protesters in Bad Salzungen wrapped in a rainbow-colored flag. “I think everyone has a responsibility to make sure that this never happens again in Germany.”
--With assistance from Monica Raymunt and Tom Fevrier.
(Updates with German plan to deport Afghan nationals)
©2024 Bloomberg L.P.