German election gets rough as Merkel lead crumbles

Germany's conservative opposition, rattled by surveys showing its poll lead has evaporated, accused Chancellor Gerhard Schroeder of lying yesterday as the election campaign turned rough.

Mr Schroeder's centre-left Social Democrats (SPD) unveiled new campaign posters that turned up the heat on conservative leader Angela Merkel and her shadow Finance Minister Paul Kirchhof ahead of the election on September 18.

"Merkel/Kirchhof: radically unsocial!" read one of the posters, underlining the SPD's strategy of painting Mr Kirchhof, who wants a flat tax that would transform Germany's fiscal system, as a dangerous neo-conservative radical.

A leaflet campaign next week will accuse Ms Merkel's Christian Democrats (CDU) of planning "the end of social Germany."

CDU General Secretary Volker Kauder said he was appalled. "That a serving chancellor should lie so brazenly is unique in the history of the Federal Republic," he said.

Other leading CDU officials lashed out at Mr Schroeder.

"All these examples that the SPD is publishing in their expensive advertisements, it's all a lie," deputy CDU parliamentary leader Wolfgang Schaeuble said.

"It's deception, it'a a completely false presentation of the effects of the tax reform."

Exchanges in German election campaigns are not normally as bitter as in other countries. But the angry tone reflects the speed with which the stakes have been raised as the conservative lead has crumbled in recent days.

A new poll taken by the Allensbach institute for the Frankfurter Allgemeine Zeitung was the fifth this week to show Ms Merkel's lead had slipped to the point where she may no longer have enough support to form a centre-right government with her preferred partners, the liberal Free Democrats (FDP).

That has opened up the prospect of a "grand coalition" between CDU and SPD as possibly the only viable majority in parliament, an outcome financial markets fear could lead to economic reform in Germany being stalled.

Mr Kirchhof said yesterday he would not serve in a grand coalition with the SPD, while conservative campaign managers sought to deflect attention from his proposals, which are far more radical than the actual conservative platform.

"My chance, my place would be in a black-yellow (CDU/FDP), not a grand coalition," Mr Kirchhof told a campaign rally in eastern Germany.

The outcome of the election could be complicated by the death of a far-right candidate in the eastern city of Dresden. That will require a separate by-election to be held on October 2 after the main poll. This could settle the outcome if the race remains as tight as it appears at present.

Both sides insist they are going for outright victory but the conservatives, who had been leading the polls ever since Mr Schroeder announced in May that he would call an early election, appear to be under most pressure.

Two surveys published yesterday confirmed the trend seen this week, with support for the potential centre-right coalition parties slipping below the combined tally for the the three other main parties, the SPD, Greens and the new Left Party.

Large numbers of voters remain undecided heading into the final week of campaigning.

Support for Mr Schroeder's SPD has grown since last Sunday's television debate with Ms Merkel. The change also reflects scepticism about Kirchhof's radical tax reform proposals which would set a uniform flat tax on all forms of income and cut an array of subsidies and tax breaks.