Euro crisis cements Merkel support for election duel

Merkel, 58, will seek to fire up her conservative Christian Democrats (CDU) at their two-day party conference in the northern city of Hanover from December 4, eyeing a third term as chancellor in autumn 2013.

Opposing her from the centre-left is Peer Steinbrueck, 65, whose Social Democrats (SPD) already faced an uphill struggle to unseat arguably Europe's most influential leader even before their leading light became embroiled in a nagging fees-for-lectures debate.

Known as a straight talker, Steinbrueck, a finance minister under Merkel in a former "grand coalition", will address the SPD rank-and-file in Hanover on December 9, with polls showing a significant CDU lead.

While the general elections, whose date has not yet been set but must be held next September or October, are expected to usher in the third CDU-led coalition since 2005, its likely partner is less clear.

After historically scooping nearly 15 percent of the 2009 vote, Merkel's current junior partner, the pro-business Free Democrats have plummeted in the opinion polls to below the five percent level required to enter parliament.

Vilified in parts of southern Europe over her pro-austerity mantra, Merkel has become Europe's 'go-to' leader at the helm of the crisis-wracked bloc's top economy, and, at home has long been Germany's most popular politician.

Steinbrueck has been dogged, since being picked end-September, by a cacophony of questions about the 1.25 million euros ($1.62 million) he made from speeches on the side, prompting news weekly Spiegel online to dub him "The Wrong Candidate".

With the focus so far on his earnings rather than his policies he was roundly punished in the polls earlier this month, his approval ratings slumping nine points from October, while bickering within Merkel's fractious coalition has not dampened approval of her handling of the euro crisis.

--- Merkel seen as 'not getting nervous' ---

Political scientist Gero Neugebauer, of Berlin's Free University, said that Merkel's popularity among voters boils down to her cool and calm guardianship of Germany's purse strings, amid bailouts of several eurozone nations.

"German voters are happy with Mrs Merkel because the majority believe that she is protecting their interests from the need, the ambitions of other countries," he told AFP.

She "is appreciated for her way... of not getting nervous, being almost emotionless," he added.

Analysts say the financial rollercoaster that has brought Europe to its knees over the last three years will be a hot-button issue in Germany's election campaign.

And the longer Europe remains mired in crisis, the better it could be for Merkel because "in a crisis situation the population stands more firmly behind her", political scientist Gerd Langguth told AFP.

However he warned of a possible backlash if aid to pull Greece back from the brink of bankruptcy is deemed too costly.

To supporters' cheers Steinbrueck pulled no punches in the Bundestag lower house of parliament last week when he accused Merkel of doing a "dance of the seven veils" over the actual cost to German taxpayers of rescuing debt-ridden Greece.

Merkel nimbly retorted that hers was the "most successful government since reunification" in 1990.

"All parties want to save the euro, but all also want to win the Bundestag election at all costs," the Sueddeutsche Zeitung daily said a day after the two rivals crossed swords.

"Therefore fierce quarrelling hangs over the next stage of help for Greece," it said.

With unemployment rising and slowing growth, Germany is showing signs that the crisis is taking an increasingly heavy toll after having so far proved more resilient than its neighbours.

Steinbrueck has called for tougher regulation on banks but Neugebauer said that if the SPD is to wrest power next year, its links to German economic circles are so good that business leaders would not be in for a "shock".

However the SPD faces a "handicap" in voters' eyes from the lack of a clear political distinction between the two parties which are close in their stances on a number of issues, Langguth, a Merkel biographer, said.

And quick political changes of heart also hold no fear for Merkel.

"She's no ideologue, she's a pragmatic problem-solver and that is what people want," he said.