Merkel eyes centre-right as German election nears
HAMBURG/BERLIN (Reuters) - Chancellor Angela Merkel looks on track to win a second term in a German election on Sunday and may be able to form the centre-right government that eluded her four years ago, final polls before the vote showed.
After running an awkward "grand coalition" with her main political rivals, the centre-left Social Democrats (SPD), since 2005, Germany's first woman chancellor is hoping to team up with the business-friendly Free Democrats (FDP) this time around.
As leader of a centre-right government, Merkel has said she would pursue tax cuts and extend the life of nuclear plants that are scheduled to be phased out over the next decade.
Germany is emerging from its deepest recession since World War Two and the next government will have to rein in a surging budget deficit, cope with rising unemployment and confront fragile banks that are paring back lending and threatening the nascent recovery.
Wednesday, Merkel rejected calls from the SPD for tough spending cuts to consolidate the budget, saying Germany was in no shape to embark on a rigid savings path.
"We should not confuse a stay in a convalescence centre with a visit to a weight-loss clinic," she told the Frankfurter Rundschau newspaper in an interview.
A survey by Forsa for Stern magazine, probably the last to be published before the vote, gave Merkel's conservatives a nine-point lead over the SPD, which would virtually ensure she wins a new four-year term.
The Forsa survey mirrored the other polls released over the past few days in giving Merkel's conservatives and the FDP -- known in Germany as a "black-yellow" coalition because of the party colours -- a parliamentary majority.
Centre-RIGHT LEAD WAFER THIN
But it also showed that majority is wafer-thin, with conservatives on 35 percent and the FDP on 13 percent, a mere percentage point ahead of the three other big parties -- the SPD, environmentalist Greens and far-left "Linke," or Left.
The most likely alternative if the conservatives fail to get a centre-right majority is another "grand coalition" with the SPD, an awkward partnership of rivals that had existed only once in the late 1960s before Merkel was forced into one in 2005.
She worked surprisingly well with the SPD over the past four years, repairing ties with the United States after the strains of the Iraq war, consolidating the budget before the crisis hit and introducing stimulus packages worth 81 billion euros to fight off the downturn.
But analysts fear a new grand coalition would be less stable and harmonious, in part because of divisions within the SPD.
For Merkel's SPD challenger Frank-Walter Steinmeier, who spoke to a few thousand supporters in the northern port city of Hamburg Wednesday, a grand coalition is the only realistic hope of staying in government.
"I'd love to see the SPD form a government with the Greens, but I'd settle for another grand coalition," said Jennifer Neufend, a 30-year old trainee teacher, who attended the rally.
"I'm not a fan of the grand coalition -- it can't get much done. But it would surely be better than black-yellow."
Merkel's hopes of avoiding a grand coalition could hinge on her Christian Democrats (CDU) winning what pollsters estimate could be up to 20 additional "overhang" seats in parliament.
These seats result from a quirk in the German election system, where voters cast two ballots -- one directly for a local candidate and the second for a party. These seats could put the centre-right over the top even if their support dips between now and election day.
"It's going to be another close race," said Forsa head Manfred Guellner. "But if one takes the overhang seats into account, the conservatives and FDP may well be able to get a majority."
(Editing by Sonya Hepinstall
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