Eva Cahen | Correspondent | Friday, September 16, 2005
Polls still point to a victory for Merkel, the Christian Democratic Union (CDU) candidate, who if successful Sunday would become Germany's first woman chancellor.
However, she appears unlikely to have sufficient support to form a government without entering an alliance with another party. Depending on the outcome of the vote, the CDU's coalition partner could be its conservative Bavarian sister party, the pro-business Free Democrats -- or maybe even Schroeder's Social Democratic Party (SDP).
Schroeder's recent gain in the polls has prompted much speculation that Merkel might be forced to form a new government with the SDP, a so-called "grand coalition" of the two major parties. Although Schroeder would not personally participate in such a government, it would restrict some of Merkel's reform plans.
Merkel's lead has been attributed to a focus on economic policies which have made the incumbent highly unpopular. Unemployment in Germany is at a record high of 12 percent and there has been practically no economic growth in the last five years.
No matter what the outcome of Sunday's elections, analysts predict changes in Germany's relations with other nations, specifically the U.S.
Schroeder won reelection in 2002 on the back of public support for his opposition to the U.S. plan to go to war against Saddam Hussein, a stance that soured relations between the German leader and President Bush.
Merkel has accused Schroeder of anti-Americanism, warning that there could not be a "strong and unified Europe that is against America."
"If Merkel gets elected it will definitely be positive for Germany's relationship with the United States because there was a personality problem between Schroeder and Bush," said Aurore Wanlin, a research fellow at the Center for European Reform in London.
Wanlin did not believe, however, that transatlantic relations would not return to the level of warmth they enjoyed during the Cold War and the Helmut Kohl era (1982-1998).
"Germans used to be grateful after the Second World War when the U.S. helped rebuild Germany but now Germans think that is the past," said Wanlin.
"They have become pacifists and they don't share the views of the 'neoconservatives' in the U.S. They're quite shocked by their attitudes toward Iraq and even Iran."
Popular sentiment against sending troops to Iraq remained overwhelming, making it unlikely that Germany would contribute to the multilateral force there.
Another predicted shift in the event of a Merkel victory is in Germany's relations with other European countries.
In contrast to the close partnership Schroeder now has with Russian President Vladimir Putin and French President Jacques Chirac, Merkel is expected to seek a closer relationship with Britain.
At the same time, Germany depends on Russia for about one third of its energy needs so it cannot afford to jeopardize ties. Similarly, the ties between France and Germany have a historical basis built on common interests, which Germany does not necessarily share with Britain.
Berlin's position on Turkey will likely change under Merkel, whose party is opposed to Turkey's application for membership of the European Union. Schroeder supports Turkey's bid, as does the U.S.
Europeans are closely observing the campaign in Germany for reasons beyond foreign policy. Merkel's promised economic reforms, which will liberalize Germany's welfare state economy, could trigger change in other western European countries such as France and Italy, where politicians are also debating similar issues.
"If Angela Merkel gets elected, it will be positive in the economic reform process in Europe," said Wanlin. "There's going to be a big momentum and Europe needs Germany to be performing well."
Germany is Europe's larges economy and the world's third-largest, after the U.S. and Japan.
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