Schroeder's plan B is New York

GERMANY - Chancellor Gerhard Schroeder has said he will consider moving to New York if he is defeated tomorrow. If the polls are anything to go by, the best his Social Democrats can hope for is to be installed as junior partners in a messy "grand coalition" with the conservatives under Chancellor Angela Merkel. There would be no room for Schroeder in this arrangement.

Merkel promises more far reaching economic changes to kick-start Germany's ailing economy. Yet she is likely to take the credit for the fruits of a process that Schroeder began.

Germany may have record unemployment - now close to five million - but on foreign markets the economy is booming and his programmes have at least begun to halt the 16 years of economic near-stagnation that was the legacy of Merkel's conservative predecessor, Helmut Kohl.

But Schroeder launched his programme too late to cut into unemployment and voters are punishing him. His decision to call the election a year earlier than planned, has compounded the problem.

Yet the real cause of his likely disappearance lies within his own party. The "bosses' Chancellor", as he was once called, was never liked by large sections of his SPD. He was an outsider, pulled in late as a sure vote-winner in 1998. The rank and file disliked his programme of economic change even more than they disliked him. Both developments were reasons enough to call an early election.

Merkel's centre-right Christian Democrats (CDU) still lead Schroeder's centre-left Social Democrats (SPD) in the polls, putting her on course to become Germany's first woman Chancellor and the first to have grown up in communist East Germany.

But strong campaigning by Schroeder has cut her lead to the point where she may no longer be able to form a centre-right coalition with the liberal Free Democrats (FDP) and may be forced to share power in a "grand coalition" with the SPD.

Meanwhile, the European Commission is at the centre of a political storm after the Dutch competition commissioner openly backed Merkel. Neelie Kroes flouted an unwritten rule among commissioners by wading into the tight election campaign, claiming that a Merkel win would liven up Germany's stuffy bureaucracy.

In Holland's Trouw newspaper she said she normally would not comment on a country's internal politics, but she was making an exception because "otherwise I would miss a big opportunity to discuss the wider participation of women in politics ".

Her comments infuriated political opponents. Daniel Cohn-Bendit, leader of the Green faction in the European Parliament, called her endorsement "scandalous and unacceptable" and an "unprecedented" interference in domestic politics.

- Independent and Reuters