Closely fought campaign heads for a photo finish

GERMANY: German voters are split 50/50 as they face a general election tomorrow

GERMANY: German voters are split 50/50 as they face a general election tomorrow. Derek Scally reports from Berlin, where people seem to want Chancellor Schröder (but not his party) with the opposition CDU (but not its leader)

Suspense is building in Germany as the general election heads for a photo finish tomorrow. The most closely-fought campaign in memory is over, but when it comes to picking a victor, all bets are off.

In a popular Internet café in western Berlin yesterday, surfers took a break from their shoot 'em dead computer games to try to decide how to vote.

One surfer tried the "Vote-o-Mat" website that asks 27 questions and then gives a voting recommendation based on the answers. Another was using the electronic photo-fit website "Chancellor Generator", matching Gerhard Schröder's hair and fleshy nose with the bespectacled eyes and toothy smile of his conservative rival, Dr Edmund Stoiber. (It's fun, try it. http://de.news.yahoo.com/wahl/fun/)

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"Here's the perfect new leader for Germany: Germund Schoiber," declared first-time voter Mr Florian Sarbacher (20). "The difference between the two big parties' politics is as small as the difference between them in the polls." Germany's election campaign was dominated by the domestic: the economy and the floods and the candidates' fight for the middle ground. But tomorrow's vote could end up being decided by the looming war in Iraq.

After all it was Iraq that gave Chancellor Schröder the final boost he needed to revitalise the Social Democrats (SPD), lagging behind the conservatives since Christmas.

By mid-summer, the conservative challenger, Dr Stoiber, had built up a 9 per cent lead simply by attacking the government's economic record.

Dr Stoiber's message was simple: unemployment is back where Helmut Kohl left it in 1998 and Germany is now the economic basket case of Europe.

Then the heavens opened and eastern Germany sank under water. The flood water destroyed hundreds of existences but provided a rising tide to lift Mr Schröder's election boat and washed away the conservatives' lead.

When he launched his re-election campaign in his hometown of Hanover last month, it was obvious that Mr Schröder, the election fighter, was back. The opposition, sure that the chancellor had no more rabbits to pull out of his hat, was caught off guard when he pulled out something else entirely: Saddam Hussein.

"Under my leadership, this country will not make itself available for military misadventures," he thundered with the confidence of a man who had found his winning theme.

The promise that Germany would go its "own way" on Iraq annoyed Washington but was exactly what war-wary German voters wanted to hear. In a matter of weeks, Mr Schröder turned the election upside down, closing a seven-point gap with the conservatives and even pulling two points ahead.

"The opposition triumphed too early, they were too sure of themselves," Mr Schröder said. That's an opinion shared by Mr Hans Vorländer, a political scientist at Dresden University. "At this point I don't see any chance that the agenda could be changed so much to put Dr Stoiber back in the lead."

For Germany's European neighbours, this election campaign will be remembered as one where the European Union, and its looming enlargement, barely figured.

A Schröder win would end Europe's lurch to the right, while Dr Stoiber as chancellor would renew the Franco-German axis and unite with the French against reform of European agricultural subsidies.

But whatever the hue of the next government, it will face the difficult task of trying to kick-start the German economy while introducing austerity measures to keep the budget deficit below the 3 per cent stability pact ceiling.

Germany's unions and employers fell in behind the two candidates as expected: union leaders backed Mr Schröder while business leaders supported Dr Stoiber, who promises business-friendly reforms, including looser hiring and firing rules. Despite these and other clear recommendations, however, one in five voters remains undecided.

It was no surprise, then, that Dr Stoiber ended his weeks of campaigning in the western state of North-Rhine Westphalia, home to one in five Germans, and thus the largest block of undecided voters.

Germany's poor economic performance and record numbers of bankruptcies have left the normally staunch SPD voters here in the country's industrial heartland fearing for their jobs.

"The economy, work and immigration are the most important issues for the people of this country - and these are our issues," bellowed Dr Stoiber, returning to the arguments that once gave him a seemingly unassailable lead.

"The polls show that victory is within our grasp. Help to give our alliance a clear lead in this neck-and-neck race."

With the race so tight, Germany's next government could be determined by the fate of the smallest political party in parliament, the reformed communist Party of Democratic Socialism (PDS).

The PDS will be shut out of parliament if, as polls predict, they fail to reach the 5 per cent cut-off.

But voters in eastern Germany could still decide at the last minute to vote for the reformed communists, as happened in 1998, helping the party into parliament but increasing sharply the number of votes any coalition will need for a parliamentary majority.

That could spell the end of the SPD-Green coalition, and turn the liberal, business-friendly Free Democrats (FDP) into kingmakers with either the SPD or the CDU.

A return of the PDS could throw up another scenario, where all possible coalition combinations are short of an overall majority. That could leave one unpalatable option: a repeat of the grand coalition between the SPD and CDU that governed from 1966-1969.

"A grand coalition will get us nowhere. I don't want a grand coalition because it will not provide the solutions we need," said Dr Stoiber.

The chancellor has also spoken out against such a constellation, but added that "all political parties should in theory be able to work together".

German opinion pollsters threw up their hands in defeat yesterday as final polls showed that support for the CDU and SPD was within the 2 per cent margin of error.

Mr Manfred Güllner, of the Forsa polling institute, said: "Voters are in a dilemma. They want to re-elect Schröder but not the SPD. With the CDU it's the exact opposite. Anything is possible."