Q&A: German elections

Germany goes to the polls on Sunday, a year ahead of schedule.

Chancellor Gerhard Schroeder, whose Social Democratic Party (SPD) has ruled with the Greens since 1998, looks likely to lose his job to Angela Merkel, head of the Christian Democratic Union (CDU). The BBC News website looks at some of the key election issues.

Q: Why is this election being held now?

The high unemployment rate tops the election agenda

Mr Schroeder announced in May that elections would be brought forward by a year, after his SPD suffered a crushing electoral defeat in the key industrial state of North Rhine-Westphalia - previously a party stronghold.

He said general elections were necessary for the government to continue the reforms aimed at reviving the German economy.

The reforms called Hartz IV, designed to reduce the cost of the welfare state and make the labour market more flexible, have proven unpopular and triggered a wave of protests.

They involved a radical shake-up of the unemployment benefit system so that payments became means-tested and claimants refusing to accept offers of work were penalised.

To old left-wingers, such measures were tantamount to a betrayal of SPD principles, but Mr Schroeder argued they were essential to kick-start the economy and get Germans back to work.

Q: What are the main issues for the two principal parties?

The pollsters agree that this election is more about rejecting the current government than embracing the ideas of a new one. Nonetheless, there are some key issues at stake.

Unemployment

Given that Mr Schroeder came to power on a promise to cut the number of unemployed to as low as 3.5 million, the high jobless figure has inevitably become a key element of this election. The number seeking work did fall in August for the fifth month in a row, but still sits stubbornly above 11%.

Mr Schroeder has urged people to be patient, but many have lost their faith. Mrs Merkel has promised to speed up the reform drive started by Mr Schroeder, vowing to curtail the grip of employers' associations and trade unions on setting industry-wide wages, relax hiring and firing laws, and cut non-labour wage costs.

Tax reform

Mr Schroeder lambasts Mrs Merkel on Turkey and taxes

Mrs Merkel's programme includes increasing VAT by two percentage points to offset a reduction in social security costs for employers, a plan which has economists divided. There are fears such measures could keep people out of the shops. A plan mooted by her shadow finance minister Paul Kirchhof to introduce a flat tax of 25% has been ridiculed by the SPD, who argue it will rob from the poor to benefit the rich.

Families

As Germany's birth rate continues to decline, both parties have sought to emphasise how family-friendly they are. The SPD is offering to pay one parent three quarters of their income for a year to stay at home after the birth of a child. The CDU rejects a payment, instead pledging tax breaks and reduced pension contributions.

Mrs Schroeder's intervention into the campaign, in which she accused Mrs Merkel of being unable to understand women's problems because of her childless state, is not thought to have assisted the SPD cause.

Turkish membership of the EU

Mrs Merkel has made clear her opposition to Turkey joining the EU, arguing it should instead be offered a "privileged partnership". This is thought to play well among many Germans, but Mr Schroeder accuses her of making a fatal foreign policy mistake. An ardent supporter of Turkish membership, Mr Schroeder says binding Turkey - with its moderate version of Islam - into the West is essential for Europe's long-term security

Q: What about the personalities?

This election is also about characters. Mrs Merkel has sought to use her reputation for being rather dowdy and uncharismatic to her advantage. It is thought many voters have grown weary of the slick "media chancellor" and his failure to deliver on his promises. Mrs Merkel may have spruced up her look with brighter colours and a fresh haircut, but she still hopes to come across as the more honest of the two.

For their part, the SPD hope their telegenic leader can use his charm to claw his way back in the polls - just as he did when trailing in the last election campaign.

Q: So who is going to win?

The final opinion polls before the election gave Mrs Merkel's conservatives a slim lead. Mr Schroeder's party has managed to chip away at the CDU's once double-digit lead.

However, even with so many undecided voters - about a quarter of the electorate - few believe Mr Schroeder could really make a comeback and reassemble his coalition with the Greens.

Mrs Merkel has changed her wardrobe

But even if the CDU and its CSU sister party emerge, as expected, as the largest political force, they too are expected to form a coalition.

Much depends on the extent of their victory and the success of their chosen coalition partner, the Free Democrats (liberals).

If they do not have enough to form a majority, the conservatives may end up joining forces with the SPD, forming a so-called "Grand Coalition".

The last such formation was in the 1960s. "This was very successful because it pushed through several reform programmes," says Peter Loesche, politics professor at the University of Goettingen. "Thus there are quite a few people who think that a new grand coalition might push through reforms which are necessary in Germany today."

Q: Much has been made of the new Left Party. What will happen to them?

The party of former communists and SPD supporters unhappy with welfare reforms has been the surprise addition to this election and has stolen support from both the main parties. Some of the gloss has come off amid allegations that one of its leaders demanded a private jet to attend an interview. Yet the party is still thought likely to emerge as the third strongest force, ahead of the Free Democrats and the Greens. It has picked up substantial support in eastern Germany, where there is widespread disillusionment with the major parties. However its long-term prospects are still unclear.