Merkel stands tall in voting minefield

Germans go to the polls in just over a month with the task of determining the course of Europe's biggest economy and the future of its most influential leader.

Chancellor Angela Merkel has the chance of reshaping Germany's political landscape if, as opinion polls tentatively predict, the parliamentary vote goes her way.

Merkel's conservatives have been locked in an increasingly fraught "grand coalition" with the Social Democratic Party that has steered a centre course for the past four years.

A win in the September 27 poll would enable her to team up with the pro-business Free Democrats, setting the country on a centre-right course for the first time in more than a decade.

It would also consolidate Merkel's position as Europe's political heavyweight among contemporaries who are better known for grandstanding and lame-duckery.

The US business magazine Forbes last week named the 55-year-old daughter of an East German pastor the world's most powerful woman for the fourth year in succession.

"Leadership is in short supply all over Europe; sombre introspection seems the order of the day," believes Constanze Stelzenmueller, a senior fellow at the German Marshall Fund thinktank.

Merkel has parlayed her frumpy, middle-aged housewifely image into an article of strength.

Quiet-spoken but resolute, she faced down hostility from the Bush Administration for opposing German involvement in the Iraq war. Her humility and pragmatism were the magical tools that in 2007 forged the European Union's landmark deal on climate change.

And when the global financial crisis erupted in 2008, Merkel never panicked and stood by a stimulus package that focused on building infrastructure rather than spurring consumption.

According to a poll published for ZDF television a week ago, a stunning 64 per cent of Germans favour Merkel's re-election. Only 23 per cent favour the SPD's champion, the lacklustre Foreign Minister, Franz-Walter Steinmeier. It is the largest gap since polling on chancellor preferences began in 1977.

But this stellar support is no guarantee of gains for her Christian Democratic Union (CDU) and its Bavarian partner, the Christian Social Union (CSU). Germany has a complex system in which voters choose parties, not individuals, through proportional representation. When these are factored in, the conservatives would have 37 per cent of the seats in the Bundestag and the Free Democrats 14 per cent - a slim 51 per cent majority.

And the country also has a tradition of last-minute swings in the election campaign. In the summer torpor, nearly a third of voters say they are still undecided and fringe candidates, the Greens and radical left are making the headlines.

With nearly 3.5 million Germans out of work, the Social Democrats are pushing a 67-page manifesto that would provide full employment, mainly through "green industries" such as making electric cars and service jobs in health and geriatric care.

But the programme, accompanied by personal barbs aimed at Merkel herself, has been attacked by some as wishful thinking and poor strategy.

"It's a desperate attempt to stake out position in a policy area where the CDU has much higher ratings," political scientist Peter Loesche told the daily Tagesspiegel. "It's a real problem for the SPD, because this is the issue that will decide the election."

On August 12, the country was officially declared to have pulled out of recession when figures surprisingly showed that the economy had grown after four quarters of contraction, thanks to a strong increase in exports.

The FDP has long been the swing party in German politics, teaming up with parties to its right or left to form governing coalitions. The last time the country was run by a centre-right alliance was in 1998.

If the team-up is replicated this time, Merkel would be able to give freer rein to her instinct for market liberalism, which she has had to stifle for the past four years.

Likely policies would include tax cuts, selling shares in state-owned companies and, most controversially, a reprieve for Germany's 17 remaining nuclear power stations. The reactors are due to be phased out around 2021.