Germany’s conservative bloc is set to retain control of Hesse and Bavaria, ensuring political continuity in the economically critical states, while Chancellor Olaf Scholz’s ruling coalition suffered another stinging defeat.

The Christian Democratic Union won 35.5% of the vote in Hesse, while its Bavarian sister party, the Christian Social Union, took 37% in its state, according to exit polls from public broadcaster ARD. The affiliated parties make up the largest opposition group at the national level.

Scholz’s Social Democrats and its two governing partners — the Greens and the Free Democrats — lost support in both states in the latest setback for the ruling parties. Scholz’s ruling alliance — which took power in late 2021 — has been beset by infighting that has damaged its standing among voters. Combined, the three parties lost 10.6 percentage points in Hesse and 4.9 percentage points in Bavaria.

“When all coalition parties lose in both states, there’s a message here for Berlin,” said SPD General Secretary Kevin Kuehnert said in interview with ARD.

The anti-immigrant Alternative for Germany gained in both Hesse and Bavaria, building support outside the former communist eastern states. The far-right party has tapped into economic uncertainty and concerns about rising illegal immigration and has surged into second place behind the CDU/CSU in national polls on around 20% — ahead of all three governing parties.

Scholz has dismissed the AfD as a “demolition squad” that exploits the fears of ordinary citizens but has struggled to convince voters that his government is equipped to manage Germany’s transition to a cleaner and more technologically advanced economy.

After distributing billions of euros in aid to soften the impact of the pandemic and the energy crisis, the chancellor has ruled out a stimulus program for the German economy, even as it barely emerged from a winter recession in the second quarter.

The run-up to the Bavaria vote was overshadowed by an antisemitism scandal around the CSU’s coalition partner, the Free Voters. The regional party’s leader Hubert Aiwanger was under fire over links to a flier from the 1980s that threatened traitors to the “fatherland” with a “free flight up the chimney at Auschwitz,” the Nazi deathcamp.

While acknowledging the flier’s existence, Aiwanger said he wasn’t the author, and Premier Markus Soeder from the CSU decided there were insufficient grounds to dismiss Aiwanger.

Soeder’s messy handling of the scandal ended up hurting the CSU, which stumbled to its worst result in Bavaria since 1950 (27.4%). The Free Voters gained support and the two parties will likely continue their alliance in Bavaria.

--With assistance from Iain Rogers.

(Updates with more figures beginning in third paragraph)