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Schroeder makes a comeback

Luke Harding

Germany faces political instability

BERLIN: German Chancellor Gerhard Schroeder is closing the gap on his conservative rival, Angela Merkel, according to the latest opinion polls, making it increasingly possible that the challenger could be forced into a ``grand coalition'' with the ruling Social Democrats (SPD).

British Prime Minister Tony Blair made a controversial intervention on Sunday night. In a statement released by the SDP he described Mr. Schroeder as ``prudent and at the same time a statesman with strong leadership qualities.''

British diplomats who had expected a Merkel victory are now bracing themselves for another possibility: that Germany, Europe's largest country and biggest economy, could be sliding towards months of political instability and drift.

Merkel still ahead

With four days to go until Germans vote, Ms Merkel's Christian Democratic party (CDU) is still ahead with 40.5 per cent. But Mr. Schroeder's Social Democrats have gone up to 34.5 per cent after an unexpected comeback in the final stages of the campaign.

Together, Germany's Left parties now have 49.5 per cent of the vote, compared with 47.7 per cent for Ms Merkel's coalition, according to the Emnid Institute poll.

The gap is enough to stop Ms. Merkel forming a Centre-Right government with the CDU's Bavarian sister party, the CSU, and junior coalition partner the FDP.

She is still likely to become Germany's Chancellor next week. But her initial lead in the polls started to ebb away following a row over her appointment of Paul Kirchhof as shadow finance minister. The SPD launched a brutally effective campaign against Mr. Kirchhof, a former constitutional judge, portraying his plans for a 25 per cent flat tax as unjust and a gift to the rich.

The two main parties offer starkly different policies on taxation and reform of Germany's labour market, although on home affairs and the fight against terrorism they are in broad agreement. Increasingly jittery conservative politicians warned that a Left-Right coalition — last tried in Germany in the late 1960s with mixed results — would be a disaster.

Grand coalition

Most experts expect the SPD to enter a ``grand coalition'' with Ms. Merkel, and for Peer Steinbruck, the SPD's recently defeated Premier in North Rhine-Westphalia, to become her deputy.

``I find him very credible. He's intelligent and competent,'' Ulrike Merten, an SPD MP, said. But she admitted: ``A grand coalition would put us in a very difficult situation.'' — © Guardian Newspapers Limited 2004

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