German rivals clash over economy

By Ray Furlong
BBC News, Berlin

Polls suggest Mr Schroeder's party has closed the gap

German Chancellor Gerhard Schroeder and his challenger Angela Merkel have clashed in a second and final TV debate ahead of Sunday's election.

In heated exchanges, the chancellor attacked the opposition conservative's economic policies, while Mrs Merkel accused him of scare tactics.

The latest opinion polls suggest the election may result in a deadlock, with no clear majority for either leader.

The debate also included the leaders of smaller political parties.

Mr Schroeder's Social Democrats are closing the gap on the conservative opposition and he used this debate to keep up the pressure.

Sharply attacking the opposition's plans for tax reform, he said they wanted millionaires to pay the same amount as secretaries and that by contrast he stood for economic reforms which were socially fair.

But the conservative leader, Angela Merkel, was just as sharp in return.

"You have failed," she told him, pointing to mass unemployment in Germany.

She added that the chancellor was trying to scare the voters rather than honestly explain what was needed to improve the economy.

But for all the ill-humour , opinion polls suggest that neither Mrs Merkel nor Mr Schroeder will be able to form a workable Bundestag majority, making a grand coalition of their two parties seem increasingly likely.

It was perhaps telling that when asked, Mrs Merkel did not specifically rule out serving in a grand coalition.