Germany's Merkel faces test in divisive state vote

By Madeline Chambers

FRANKFURT (Reuters) - Applause ripples through the traditional wood-panelled inn where a group of smartly-dressed women tuck into sausages and sauerkraut and listen intently to Roland Koch, Germany's conservative premier of Hesse.

A senior figure in Chancellor Angela Merkel's Christian Democrats (CDU), Koch touches on education and the economy but his promise to clamp down on crime committed by people with a foreign background is what gets the loudest applause.

"He has dared to say what we all think about our policy towards foreigners. We're scared to go out at night -- someone must do something," said Inge Horstmann, an indignant pensioner who has lived in the central state of Hesse for 40 years.

Koch knows more is at stake in the January 27 election in Hesse than his own third term.

His campaign on crime and immigration has won national resonance and the Hesse vote -- as well as one in the state of Lower Saxony on the same day -- is an early test for Merkel ahead of next year's federal election.

A poor result for Koch would reflect badly on the chancellor, who surprised some in Germany two weeks ago by strongly backing his crime proposals despite anger from immigrant groups who say they are xenophobic.

"Hesse will affect Merkel more than usual as she has been drawn into Koch's divisive debate," said Claus Leggewie, political scientist at Giessen University in Hesse.

Opinion polls have shown Koch's lead eroding in recent weeks. He seems sure to lose his absolute majority but is hoping to stay in power by sealing a coalition with the liberal Free Democrats (FDP).