Angela Merkel: The German leader set to eclipse Margaret Thatcher

But she faces a dilemma as her coalition partners struggle to retain their parliamentary presence

Angela Merkel on the campaign trail in Hannover (AP)

Chancellor Angela Merkel is firmly on course to win an historic third term in tomorrow’s German general election with an outcome destined to reinforce her role as Europe’s most powerful leader and allow her to eclipse Margaret Thatcher as the EU’s longest-serving female head of government.

Opinion polls published some 36 hours before Sunday’s vote forecast that the Chancellor would romp home to victory with her conservative Christian Democrats predicted to win 38 per cent of votes – a clear 10 points ahead of her nearest rivals – the opposition Social Democrats.

Speaking at a rally in Hanover, Ms Merkel told supporters: “We have achieved a lot together, I also want the next four years to be good.”

But with the political constellation of her future government still wide open, Ms Merkel yesterday launched a campaign to cement victory by sending personalised letters to five million voters: “If you would like to me continue serving as your chancellor, cast your ballots on Sunday and give the Christian Democrats both your votes,” she said. Germany’s electoral system gives each elector two votes: one for constituency candidates and one for a political party.

But Ms Merkel faces a dilemma. Her current liberal Free Democrat coalition partners are struggling desperately to secure enough support to overcome the 5 per cent hurdle needed to win parliamentary seats under German electoral law. The liberals suffered a disastrous defeat in key local elections in Bavaria last weekend and a large question mark hangs over whether they have any role in a future national government.

The polls suggest that the conservatives’ only option may be to form a so-called grand coalition government with the opposition Social Democrats in what would be a repeat of Ms Merkel’s ruling alliance during her first term from 2005-2009.

To complicate matters further, the Chancellor faces an additional threat from the recently formed anti-eurozone party – Alternative for Germany (AfD). The party has baffled pundits because of its unpredictability. If it manages to win seats, it could further upset Ms Merkel’s plans making a grand coalition even more likely.

Ms Merkel’s strategically important appeal for more votes was being interpreted yesterday as an attempt to win as much leverage as possible in future coalition negotiations, in particular with the Social Democrats who would be bent on making their presence felt in a future grand coalition.

Yet her unprecedented popularity, which currently stands at around 56 per cent, has allowed Ms Merkel her to maintain a massive lead over her Social Democrat challenger, Peer Steinbrück for almost a year.

Angela Merkel often seems inscrutable. Critics complain that she is “smug” and have compared her to a latter day Catherine the Great. Yet the Chancellor’s refusal to discuss the problems of the eurozone and the implications for German voters during her campaign has prompted charges that she is “running scared” of the electorate.

Ms Merkel also stands accused of having “no vision” and of being a politician who merely reacts to events rather than driving them. Her management of the euro crisis and her sudden decision to abandon nuclear power in the wake of the Fukushima disaster are cited as telling examples.

But her non-confrontational style, her cool-headed approach to problems and commitment to “serve” have turned her into one of Germany’s most popular post-war chancellors. Her hallmark is the so-called “Merkel Diamond” – an almost saint-like gesture involving the pressing together of forefingers and thumbs. It forms the centrepiece of a huge election poster outside Berlin’s main railway station.

If she keeps her coalition with the liberals, she will be unlikely to alter her tough stance towards crisis hit eurozone countries and will be in a better position to back David Cameron in his attempts to curb Brussels power. But with the Social Democrats, Ms Merkel may be obliged to soften her European austerity policies and take less interest in her Downing Street ally.

Merkel again? What they think

United Kingdom

David Cameron will look for an ally in Berlin for plans to claw back powers from Brussels. There have been hints that Ms Merkel could be such a partner, with her spokesperson this month saying devolving some decision-making was “a sensible idea”. But while polls show growing support for a German anti-euro party, most mainstream politicians share little of the suspicion of “Project Europe” seen in Britain, as the creation of the EU was instrumental in allowing Germany to reintegrate after the Second World War.

EU

Diplomats in Brussels have spoken about the EU being in a “holding pattern” ahead of the German elections, with Ms Merkel avoiding making difficult decisions at the EU level which could be criticised at home.

They are hoping the stasis will end soon, as there is plenty for any new administration to get stuck into. Most pressing is banking union: creating an oversight body for the eurozone’s financial institutions and a blueprint for closing or rescuing failing banks, a step analysts say is crucial for restoring confidence in the single currency.

Greece

As the EU’s richest nation, Germany has been instrumental in setting bailout conditions, and Ms Merkel is the bloc’s champion of austerity.

Many in Greece hold Germany directly responsible for the hardship they are facing. Greece and other bailout nations like Portugal and Cyprus will be eager for an easing of austerity. If the opposition Social Democrats do enter a coalition, there could be some softening of the austerity rhetoric, but most parties agree that tightening the purse strings is the solution to Europe’s economic ills.

France

Ms Merkel and Nicolas Sarkozy’s relationship was chummy but President François Hollande has failed to forge such a bond. He will be looking to Berlin for an ally in his bid for a more integrated Europe.

United States

Washington’s interest in the German election is for economic stability as any turmoil in the European markets has a direct knock-on effect on their recovery. Merkel brings that stability.

Scenarios: What could happen

Four more years

Angela Merkel’s centre-right coalition is re-elected. Her conservative Christian Democratic Union and its Bavarian sister party, the Christian Social Union, joined forces at the beginning of her second term in 2009 with the pro-market Free Democrats. The traditional allies agree that Germany should not increase taxes or introduce a national minimum wage.

Old friends – or new – for Merkel

If there is no majority for a centre-right government, several weeks of horse-trading are likely. The most probable outcome is a second “grand coalition” of Merkel’s conservatives and the centre-left Social Democrats, the biggest opposition party. The two sides differ over economic and social issues and, to some extent, on Europe’s debt crisis.

Steinbrück takes over

Challenger Peer Steinbrück, a Social Democrat, wants a centre-left coalition with the Greens, reviving the coalition that ran Germany from 1998 until 2005 under Merkel’s predecessor, Gerhard Schröder. This would mean a swing to the left.

Wild card upstart Eurosceptics

The Alternative for Germany party advocates an “orderly break-up” of the eurozone. If it wins the 5 per cent support needed to gain seats in parliament it’s hard to see anyone taking it into government.

Reuters