BERLIN — The Sept. 19 elections in two East German states dealt heavy losses to the country’s two major parties, with electoral gains for the left and, disturbingly, the extreme right. The voting was fueled by a continuing deterioration of living standards in the region and growing popular anger over severe cuts in benefits.

The most worrisome result was the strengthening of two neo-Nazi parties, which, by striking a deal not to run against each other, increased their presence in the Brandenburg legislature with 6.1 percent of the vote, and broke into the Saxony legislature for the first time with 9.2 percent.

In Brandenburg, the big state surrounding Berlin, the governing parties, the Social Democrats (SPD) and Christian Democrats (CDU), each lost about 7 percent of the support received in the last election. Despite this, the SPD remained in first place, with 31.9 percent, and loudly proclaimed a major victory.

The Party of Democratic Socialism (PDS), the reformed ruling party of the one-time German Democratic Republic, won 28 percent of the vote, pushing the Christian Democrats, led by a Prussian-type ex-general, into third place with only 19.4 percent.

For months the polls showed the PDS in first place in Brandenburg, but a well-financed, last-minute push by SPD incumbent Matthias Platzeck helped him prevail. But since the Social Democrats still lack a majority they must choose either to renew their current coalition with the unpopular CDU or, for the first time, swallow their differences and negotiate with the PDS, led by its vigorous chairwoman, Dagmar Enkelmann.

The SPD and CDU also lost heavily in Saxony, whose main cities are Dresden and Leipzig. Here the CDU maintained its leading position but, like the SPD in Brandenburg, sustained heavy losses. Its vote dropped by 15 percentage points, leaving it with 41.1 percent — less than a majority. So it, too, must find a coalition partner to form a government. This will probably be with the Social Democrats, who got only 9.8 percent of the vote, their worst result in history.

The PDS kept its second place in Saxony, with 23.6 percent — a small increase over its previous vote. It had expected to do even better, but a few weeks before the election the press was fed a report that the PDS’s leading candidate had once served as an informer for the “Stasi,” or secret service. Despite the candidate’s denial, and regardless of whether the charges were based on truth, half-truths or lies, the media did the required job and the damage was done. In view of this, the PDS’s gains were quite remarkable.

The main factor in both elections was the so-called Hartz reform laws, named after the Volkswagen company head who first proposed them. The laws, due to take full effect in 2005, have already prompted big jumps in costs for medical care and medicines, and less money for pensions and care for the aged.

The Hartz laws will reduce unemployment compensation after one year to near-starvation levels: a modest amount for rent and heating plus just over 130 euros ($158) per month (slightly more in West Germany). To receive this benefit, the recipient must disclose elaborate and humiliating details about his or her living situation and assets, and accept any job offered, on pain of losing all benefits.

In East Germany, with double the jobless rate of West Germany — between 15 and 25 percent — and whole regions robbed of industry since unification, these “reforms” could depress the entire wage level and bring total ruin to an already devastated economy.

Popular anger over these plans has prompted weekly demonstrations in most East German and many West German cities. It explains the big losses sustained by both the Social Democrats, whose Chancellor Schroeder proposed the laws, and the Christian Democrats, who also voted for them. It also makes clear why there were gains for the PDS, the only party in the Bundestag to vote against these laws.

Such anger also explains the gains for neo-Nazi parties, which tried to latch on to the campaign against the Hartz laws, together with propaganda against foreigners “who steal our jobs” and, less openly, against Jews. Most media, with talk of “extremists from left and right,” have perversely blamed the left for the extreme right’s gains, although the protest marches rejected all support from neo-Nazis. Indeed, for years the left has been almost alone in opposing this increasingly frightening menace.

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