Merkel’s dream coalition hangs on a knife-edge

Opinion polls dent Chancellor’s hopes of being able to forge right-wing government

Angela Merkel's long-term future as Germany's first conservative female leader is on a knife-edge; the country votes tomorrow in a general election that is destined to make or break her political career.

The popular 54-year-old Chancellor has effectively staked her future on being able to abandon her "grand coalition" government with the Social Democrats and form a new alliance with the pro-business Free Democrats

Opinion polls yesterday failed to predict a decisive outcome of tomorrow's vote. The question remains whether Ms Merkel will pull off her plans or be forced to carry on with the unstable grand coalition that could collapse at any time and end her career.

Some polls suggested, by a margin of 1 per cent, that Ms Merkel would be able to abandon her current coalition. Others forecast that she would fail to do so by a similarly small percentage. Adding to the almost complete unpredictability of the outcome, 40 per cent of Germans are still undecided.

Commentators said the election placed Germany at a crossroads. A liberal conservative coalition, commonly known as black-yellow, would allow Ms Merkel to head a government that would pursue the programme of tax cuts and liberal market reforms that she had promised to implement in the run up to Germany's 2005 elections, before she was forced to co-habit. It would also guarantee a continuation of Germany's commitment to providing a military presence in Afghanistan

But in any new grand coalition, the Social Democrats, who are already suffering the biggest drop in popularity on record, would be under pressure from within to abandon the alliance with Ms Merkel's Christian Democrats and join forces with the new-look communist party, the Linke, as it has done in several regional parliaments. Such a move would inevitably force new elections and could result in a coalition of Social Democrats, the Linke and the Greens governing Germany. It would also mean the end of Ms Merkel's career.

"Another grand coalition could break up at any moment," Margaret Heckel, a political commentator and author of a best-selling book on the German leader, said yesterday.

"The Chancellor would be unlikely to survive in that case; she would have twice failed to emerge as a clear victor." In 2005, Ms Merkel secured only a wafer- thin majority.

Yet uncertainty about the outcome has had one positive effect. At the end of what has been described as one of Germany's dullest election campaigns, the contest between Ms Merkel – named the most powerful woman in the world by Forbes for the third year running – and Frank-Walter Steinmeier – her lacklustre opponent and the country's current Foreign Minister – has suddenly been injected with a degree of suspense and excitement.

For months in the run-up to the election, the polls had predicted that Ms Merkel and the Free Democrats, led by Guido Westerwelle, would romp home with a safe majority. However a last-minute 2 per cent surge in support for the Social Democrats and a corresponding drop in support for the Christian Democrats have altered the equation completely.

Most observers said the last-minute drop in support was similar to 2005 when the conservatives lost ground because of voter fears that their economic plans were too radical. However, throughout this campaign, Ms Merkel has been careful to avoid canvassing explicitly for economic reform. Instead, she has attempted to capitalise on her huge personal popularity, won largely as a result of her foreign policy successes.

Yesterday, Ms Merkel was busy polishing her image as Germany's No 1 stateswoman. She interrupted campaigning to attend the G20 summit in Pittsburgh, where she was able to claim another foreign policy victory by securing US support for greater controls on financial bonuses and the international banking system.

According to opinion polls, much of her domestic support in recent months has resulted from perceptions among voters of Ms Merkel as a safe pair of hands who had steered the country through the worst of the economic crisis. During her campaign over the past week, she has spoken of the "greed" of bankers and her commitment to bringing the financial world under control.

Back home, leaders of the Social Democrats and Greens were quick o castigate Ms Merkel for acting against the banks abroad but doing little to regulate their activities in Germany.

Ms Merkel will have her last chance to respond to her critics at her party's final election rally in Berlin, which takes place this afternoon.

The united colours of Germany: Possible coalitions

1. Black-yellow - CDU-CSU in coalition with the FDP

Merkel's preferred scenario, that would give Germany its first government of the right for 11 years. This requires the CDU-CSU alliance to top the poll to have first crack at forming a coalition and for the CDU-CSU and the FDP between them to win more than 50 per cent of seats in the Bundestag. Latest polls gave them 35 per cent (CDU-CSU) and 13.5 (FDP) - a total of 48.5 per cent.

2. Black-red, or grand, coalition between the two big parties (CDU-CSU and SPD)

This would be a continuation of the sometimes awkward centrist coalition of Merkel's first term as Chancellor, and is favoured by the centre-right SPD. A grand coalition would easily have a governing majority - latest opinion polls gave the SPD between 24 and 27 per cent - making a total of around 60 per cent. Some object that a new grand coalition would be unstable, because of internal arguments. But they said the same four years ago.

3. Jamaica (black, yellow, green) coalition between CDU-CSU, FDP and green

A combination canvassed after the 2005 election and might be a last resort if the CDU-CSU and FDP between them do not have enough seats between them to form a majority. But they would be awkward bedfellows - even though Merkel, a former environment minister, has a strong 'green' streak - and the Greens have said they would not be interested. The prospect of even a small share of power might change that, though.

4. Traffic lights (red, yellow, green) coalition between SPD, FDP and Greens

This, too, was a possibility in 2005 and in 2002, which were both close elections, and would return the centre left to power. But this same combination was scuppered by the FDP which refused to join up with parties on the left. The FDP leader at both those elections is still FDP leader and insists that he would make the same decision this time around. Between them, though, the SPD, at 24 per cent, theFDP at 13, and the Greens at a projected 10 per cent, could make it to 50 per cent. Only possible, if Merkel is unable to form a CDU-CSU led coalition

5. Red-red-green (SPD, Linke and Greens)

Ideologically coherent and logistically possible, if these left-orientated parties do just a little better than projected. But the SPD has said it will never form a coalition with the Linke, whose roots lie in former East Germany. Some believe it would break that pledge if including the Linke made the difference between forming a government or not.

6. Red-black (Merkel’s grand coalition in reverse)

Perhaps the most dramatic option, if the SPD managed to overtake the CDU - which is unlikely to impossible - and so win the right to form the next government. Highly doubtful that the CDU-CSU would agree to join, and Merkel would almost certainly resign as party leader.

Excluded

A centre right CDU-CSU government: with, at best, a projected 35 per cent share of the vote, the CDU-CSU will be unable to govern alone. A centre-left SPD government: with, at best, 27 per cent of the vote, this belongs in fantasy land.

The election by numbers

62.2 million

Germans are eligible to vote

200,000

The number of polling stations; they open at 8am local time (7am UK time) and close at 6pm (5pm)

2 votes

Each German can vote twice: once for a particular constituency candidate and once for a party list

51%

The proportion of eligible voters who are women

3.5 million

The number of 18-year-old first-time voters

598

Number of MPs in the German parliament

28

Number of parties competing for parliamentary seats

17th

Parliament in post-war Germany's 60-year history