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The BBC's Caroline Wyatt reports
"Glum faces all round as the CDU faithful watch the results come through"
 real 28k

Monday, 28 February, 2000, 10:20 GMT
CDU fails election test
Volker Ruehe is aiming for the CDU leadership
Germany's opposition Christian Democrats have been soundly defeated in a state election - the first major test of public opinion since they became embroiled in a party financing scandal.

However, the fall in the party's vote in Schleswig-Holstein was not enough to destroy local CDU chief Volker Ruehe's bid for the party leadership.

We lost because of this scandal

Volker Ruehe
In fact, according to BBC correspondents, his chances of leading the CDU may even have received a boost after avoiding the political meltdown predicted.

The CDU, which has been immersed in a party financing scandal involving former Chancellor Helmut Kohl, received 35.2% of the vote, compared with 43.1% for the ruling Social Democrats (SPD).

The ballot was seen as a reading of the popularity of the conservative CDU after the slush fund scandal.

Senior party members are meeting to discuss the defeat.

Could have been worse

Before the scandal, opinion polls had suggested that the CDU would win the election easily.

The result means that Social Democrat governor Heide Simonis will need the support of the Green Party to continue in power as a coalition.

Ms Simonis, the only woman to lead one of Germany's 16 states, said: "We have put a stop to last year's swing against the SPD."

Victorious: State governor Heide Simonis of the SPD
The margin of defeat was respectable enough to allow CDU candidate, former defence minister Mr Ruehe, to continue his as yet-undeclared challenge for the party leadership.

Current leader Wolfgang Schaeuble, who faced an internal rebellion over his handling of the scandal, said earlier this month that he would not seek re-election in order to allow his party a "new beginning".

Mr Ruehe said: "We lost because of this scandal, but I'm proud that we've been able to stabilise our voters for the federal party."

Mr Ruehe is a key contender for the CDU leadership, closely behind the party's general secretary Angela Merkel, who has also still to declare her intentions.

Mr Ruehe has insisted that he knew nothing about slush funds containing about $1m of undeclared campaign contributions and no evidence has emerged to implicate him.

But our correspondent says Mr Ruehe has benefited from a behind-the-scenes 'Stop Merkel' campaign orchestrated in part by the CDU sister party, the Bavarian-based Christian Social Union.

They fear Angela Merkel is too liberal to represent the whole of German conservatism.

For many, Volker Ruehe remains the candidate of continuity in a party keen to put months of scandal behind it.

CDU leaders are to decide on a recommendation for party head on 20 March, ahead of a party convention in April, which will make a final choice.
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