Rocked by ferocious attacks on her shadow finance minister just days before an election, German conservative leader Angela Merkel looked poised yesterday to rehabilitate a popular party heavyweight and former rival.
Merkel, who once appeared coasting towards a center-right coalition victory, has stumbled in the past 10 days as Social Democrat Chancellor Gerhard Schroeder has turned his fire on the radical tax plans of her finance expert Paul Kirchhof.
Merkel, in an interview published yesterday, appeared to endorse a suggestion from Kirchhof that the ideal finance team in a future government would be a "tandem" arrangement with prominent conservative politician Friedrich Merz.
It was unclear exactly what role might be played by Merz, who quit as party finance spokesman and deputy leader last year after a series of heated clashes with Merkel.
Talk of a Merz comeback, four days before Sunday's election, reflected conservative nerves in the face of a late surge by Schroeder, who is bidding to repeat his dramatic comeback victory at the 2002 election.
Polls this week show Merkel still well ahead of Schroeder but short of the majority she seeks to form a coalition with her preferred partners, the liberal Free Democrats.
That could force her to team up instead with Schroeder's Social Democrats, an outcome which many Germans seem to favor.
Financial markets doubt whether such a "grand coalition" could force through radical reforms to bring down the 11.6 percent jobless rate, spur growth and cut debt.
Merkel's choice of Kirchhof, a leading academic and lawyer but a political novice, has presented Schroeder with an irresistible target for attack.
Schroeder has portrayed him as a man living on another planet, and said he would reallocate wealth from the poor to the rich by taxing bus drivers at the same rate as millionaires.
"A uniform tax rate of 25 percent means a gigantic redistribution from the bottom to the top," Schroeder told Hanover's Neue Presse newspaper.
In a series of increasingly heated exchanges, Merkel has accused the chancellor of deliberately lying about conservative policy, which would cut income and payroll taxes while raising sales tax to 18 from 16 percent.
Schroeder insisted yesterday that he will not form an alliance with the new Left Party after this weekend's German election and dismissed as "absurd" speculation over other possible coalitions.
Buoyed by polls this month that have shown his party clawing back support, Schroeder said his aim was "for the Social Democrats to be the strongest party."
Merkel still appears likely to emerge as chancellor. But recent polls have raised the possibility that an alliance of Schroeder's current coalition -- the Social Democrats and Greens -- with the Left Party, a combination of ex-communists and former Social Democrats alienated by the chancellor's welfare state reforms, could garner enough support to rule together.
Still, all three parties have dismissed the idea of forming a three-way coalition, which would face major policy and personality clashes.
"Such a coalition is completely out of the question," Schroeder said, adding that "there will no form of collaboration" with the new party.
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