Months after taking over from German chancellor Angela Merkel, Olaf Scholz and his Social Democrats (SPD) have suffered their second loss at the ballot box within two weeks in a key election seen as a test of national government policy.
The opposition Christian Democrats (CDU) won the most votes in Sunday's election in North Rhine-Westphalia, Germany's most populous state, while voter support for the SPD fell to a historic new low, according to projections from German public broadcasters ARD and ZDF.
The setback is the second in two weeks for the German chancellor, after his SPD, which is currently leading a three-party coalition government at the national level, limped to its worst-ever result in Schleswig-Holstein's state election earlier this month.
This Sunday, Germany's biggest election of the year saw the SPD achieve between 27 and 28% of the vote, according to projections - the party's worst election result in North Rhine-Westphalia's 76-year history.
The CDU meanwhile led the polls with 35.3 to 35.5%, up 2 percentage points on the party's 2017 result. The Greens made the greatest gains of all, increasing their share of the vote to between 17.9 and 18.3% according to forecasts, tripling their result from the previous election in 2017.
As a result the state's previous governing coalition, made up of the CDU and the pro-business Free Democrats (FDP) now no longer command a majority in the state parliament, paving the way for weeks of coalition talks.
The Greens are set to be kingmakers here, and the party must now decide between going into government with the CDU or the SPD. Initial polling suggest that while a two-party alliance would definitely be possible with the CDU, it may not be with the SPD.
CDU Secretary General Mario Czaja said the outcome showed that his party now clearly had a mandate to form a government in the state.
Kevin Kühnert, the leader of the SPD, argued that a coalition between his party and the Greens remained on the table, given the current coalition between the CDU and FDP in the state had been rejected by voters.
Some 13 million people were eligible to vote in the industrial western state, often seen as a bellwether for national polls, with 786,000 first-time voters.
The election campaign has been dominated by Ukraine-related topics, with energy security, the phase-out of coal and increased fuel and energy prices topping the agenda. Climate change, education policy and affordable housing also featured in the campaign.
The CDU and the SPD also clashed over the other's ties to Russian President Vladimir Putin in the years leading up to the war in Ukraine.
The SPD has now suffered two record losses at state levels, just months after national elections installed Scholz as chancellor.
While there are several years until Germany's next parliamentary elections, state elections in Germany's federal system are highly significant indicators of the national mood.
