Merkel clashes with rival in debate

Social Democrat (SPD) challenger Frank-Walter Steinmeier attacked Chancellor Angela Merkel's record on the economy in a TV clash…

Social Democrat (SPD) challenger Frank-Walter Steinmeier attacked Chancellor Angela Merkel's record on the economy in a TV clash today two weeks before a German election.

The live TV debate could help determine the outcome of the September 27th election in which conservative Merkel is expected to be re-elected.

Trailing in the polls, Mr Steinmeier went on the offensive in the debate, and attacked Ms Merkel for resisting his party's calls for a minimum wage and urged her to do more to put limits on managers' pay.

"A lesson of the financial crisis is that ... we need a new attitude toward the economy, we need an ethical basis for economic questions," said Mr Steinmeier.

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"So Ms Merkel, it is not enough to talk about international rules, we need to do the right thing here, we need a clear limit on manager bonuses ... we need a minimum wage," he said.

A relaxed-looking Mr Steinmeier also tried to take credit for a reduction in unemployment in the last four years, saying reforms introduced by the previous government of the SPD and Greens had led to the decline.

In response conservative Ms Merkel reiterated her calls for international rules to boost transparency on financial markets.

"We need rules for the international financial markets and we need to export the principles of the social market economy," she said.

The SPD is trailing Ms Merkel's conservatives in the polls by 11-14 points but analysts say up to 40 per cent of voters are still undecided and around 20 million people, or a quarter of the population, were expected to tune into the 90-minute clash.

Coalition arithmetic means the debate could be crucial.

Despite the conservatives' lead over the SPD, it is far from certain whether Ms Merkel will win enough votes on September 27th to form a coalition with her desired partners, the pro-business Free Democrats (FDP) and end a four-year alliance with the SPD.

However, aware they may end up having to share power again, Ms Merkel and Mr Steinmeier have largely avoided personal attacks and the campaign has been less combative than usual.

A conservative-FDP alliance would herald a shift to the right in Europe's biggest economy and open the way to tax cuts and an extension in the operation of some nuclear plants.

Reuters