How a German state election affects Europe

Editor's note: Sudha David-Wilp is a Senior Program Officer at the German Marshall Fund of the United States' Berlin office. She previously oversaw the Congressional Study Group on Germany, a program for lawmakers on Capitol Hill and in the Bundestag, in Washington DC.

Berlin (CNN) -- Germany's electoral map has many colors in comparison to the red and blue of America, yet on both sides of the Atlantic, battleground state elections can portend change on the national level.

Voters in North Rhine-Westphalia (NRW), Germany's most populous state, go to the polls this Sunday, and what they decide will set the tone for German federal politics just as citizen sentiments in bellwethers such as Ohio or Pennsylvania affect the balance of power in Washington DC.

In turn, Brussels will be watching because Germany is the power broker within the EU -- and this will not be the first time that NRW has caused Europe to pause while German political parties jockeyed to govern in a region that generates nearly 4% of EU GDP. The state has many large cities with a population density to match Tokyo, and nearly a quarter of Germany's top 100 companies are based there.

When NRW voters went to the polls in 2010 Europe was on their minds. The Greek drama was unfolding but the German government -- consisting of Chancellor Angela Merkel's conservative Christian Democratic Party (CDU) and its junior partner, the Liberals (FDP) -- tactically delayed any action until after the vote in NRW.

Nonetheless, the Social Democrats (SPD) and Greens came back into power in the form of a minority government. Because a budget could not be passed this March the legislature was dissolved and NRW will again hold a vote, this time with Greece confronting an exit from the eurozone and other EU nations choked with debt and high unemployment.

Sudha David-Wilp says Germany may experience instability

This week's state election will also be a referendum on Chancellor Merkel's handling of the Euro crisis.

Although Chancellor Merkel has governed since 2005, first in a grand coalition with the Social Democrats (SPD) and then with the CDU's dream partner, the FDP, since 2009, and although she consistently tops popularity polls among her peers; Germany has seen the winds of change in a number of state elections over the past two years.

The North Rhine-Westphalia electoral results will have pundits and pollsters predicting its significance for the capital. NRW is an election to watch for trends and disruptions in German politics.

In the short term, the first question will be whether or not the governing coalition will last until the next federal election scheduled for the fall of 2013. After all, Chancellor Merkel can thank the 2005 NRW election for ushering the CDU back into federal government one year sooner than hoped for.

NRW was a traditional stronghold for the SPD, and after many decades serving as a governing party, the Social Democrats along with the Greens were voted out in favor of the CDU and FDP. As a result, Chancellor Schroeder tried to consolidate power in the midst of internal struggles within his own party due to reform under Agenda 2010. At the time, Germany was suffering high unemployment and sluggish growth. Agenda 2010 was a plan to jump-start the country's social market economy with tax cuts and entitlement reductions.

Chancellor Schroeder called for a snap election that year and a few months later found himself handing over the keys to the Chancellery to Angela Merkel. Today, many would agree that Germany's current economic strength is linked to the belt-tightening and painful measures undertaken in the name of Agenda 2010.

Moreover, the 2005 NRW election introduced an era of fragmentation and disenchantment in the German political landscape. The 2005 NRW election gave rise to the Left, exhibited low voter turnout, and left the traditional catch-all parties straddling right-and-left of center.

These trends happened again during the federal election a few months later and consequently it took nearly two months for Germany to form a government.

One can only imagine the amount of coalition wrangling during the next federal election with yet another political party on the scene -- the Pirate Party.

So far, the Pirate Party, which made its debut during the Berlin state election last September, seems to have a singular focus on the interne. But the subject of transparency is also on the agenda and has struck a chord with German voters. When one hand doesn't suffice to count the number of political parties in Germany, anticipate instability within Europe's powerhouse.

Voters in North Rhine-Westphalia won't experience automated calls or be asked to donate over the internet, but the votes they cast will have an impact on the future course of Germany and its role within Europe.

The opinions expressed in this commentary are solely those of Sudha David-Wilp