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Greens suffered big losses in regional elections

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Outgoing leaders say party must adapt to new political

climate

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Greens ministers remain in post

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Next year's national election in focus

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Doubts increasing about coalition, Scholz's candidacy

(Adds context and details, reactions, analysis throughout.)

By Miranda Murray and Thomas Escritt

BERLIN, Sept 25 (Reuters) - The co-leaders of Germany's

Greens party, which is part of Chancellor Olaf Scholz's ruling

coalition, said on Wednesday they would quit after a series of

election blows that saw their party ejected from two regional

parliaments.

The decision of Omid Nouripour and Ricarda Lang comes at

a time of turbulence for the coalition, buffeted by voter angst

over the

economic challenges

facing Germany and by fierce debates over migration as a

national election looms next year.

While their move has no direct impact on the government

or on Greens ministers serving in it - including Scholz's deputy

Robert Habeck and Foreign Minister Annalena Baerbock - analysts

said it could stoke greater political instability.

"The result in Brandenburg (regional election) on Sunday

is a sign our party is in its deepest crisis for a decade,"

Nouripour told a news conference. "It is time to lay our beloved

party's fate in others' hands."

The Greens failed to clear the 5% hurdle needed to enter

parliament in Brandenburg and also that of Thuringia on Sept. 1.

Habeck, who is Germany's economy minister, said he

shared responsibility for the poor election results and called

for an open debate on the Greens' future at their party congress

in mid-November, when a new leadership will be elected.

"The Greens will reorder their ranks to start the

catch-up ahead of the elections with new force," Habeck said.

A new left-wing populist party and the far-right

Alternative for Germany (AfD) have outperformed all three

coalition parties this year, while the main opposition

conservatives lead in national polls.

All three coalition partners also suffered big losses in

their vote share in the Saxony regional election on Sept. 1 and

for the European Parliament earlier this year.

ECONOMIC WOES

Troubles have been piling up for the German economy

since Scholz's Social Democrats (SPD) forged a three-way

coalition with the Greens and pro-business Free Democrats in

2021.

Unemployment is ticking up as the export-focused

industries that drive Europe's largest economy struggle with

high energy and labour costs and increased competition from

China and the United States, including a shift to electric

vehicles that has challenged

Volkswagen

, the continent's largest carmaker.

Decades of underinvestment in crucial infrastructure are

also taking a heavy toll, causing unreliable train services, a

collapsed bridge in Dresden and other woes that have fed a

growing sense among voters that Germany is falling behind.

"The coalition is cracking up live on camera," said

Thorsten Frei, floor leader of the opposition conservatives.

"Bold decisions are needed. People expect answers on the

escalating economic crisis. And they want a U-turn in migration

policy."

Some in Scholz's party are

asking

if he should stand aside in favour of a more popular

candidate for next year's election, while speculation about

whether the Free Democrats might quit the coalition continues

unabated.

"This (move by the Greens' co-leaders) makes the

coalition even more unstable," said Stefan Marshall, political

scientist at the University of Duesseldorf, adding that Scholz

might face even greater governance challenges if he has to make

concessions to keep a new, more radical Greens leadership on

board.

The parliamentary leader of Scholz's centre-left SPD,

Katja Mast, said she believed the Greens would want to stay in

the governing coalition.

Government pledges to crack down on irregular migration

following a deadly knife attack by an immigrant in the city of

Solingen appear to have further bolstered the AfD, for whom the

topic is their core message.

The Greens need to adapt to a dramatically changed

political climate, outgoing co-leader Lang said at Wednesday's

news conference.

"Next year's election is not just any election," she

said. "(It will be a choice between) a country focussed on

achieving prosperity by sticking to climate neutrality or a

country run by people who want to back away from all that."