Sunday Germany will go to the polls to elect a new parliament. The latest opinion polls put the incumbent government coalition of SPD and Greens slightly ahead of the CDU/FDP challengers. Only the Allensbach poll puts the CDU/FDP ahead.

For more information, there's Shark Blog with a good chronicle of the Mölleman's anti-semitic mini-campaign and then there's American Kaiser, who's running a four-part series on German politics.

In part I, he writes:

Schroeder needs the votes. He has no other way to win--the voters don't like his domestic policies. If he didn't demonize the US and create an issue, Schroeder would be massacred at the polls. So the attempt to show German machismo in the face of wanton American imperialism is really just a ploy for votes.

he SPD has accomplished close to nothing, creating a quagmire with which Germans are quite upset. Unemployment has skyrocketed. In a referendum on domestic issues, Schroeder would be defeated handily. But as long as he shifts attention away from the problems facing Germany today, he will remain in the race.

I certainly agree that the posturing on Iraq is a shameful ploy for votes, but the domestic political situation is more complex than Kaiser depicts. It is true that on some domestic issues, notably the economy, Schröder has lost some of the electorate's confidence, but he's catching up. ZDF is one of the public TV networks in Germany, and they have since time immemorial cooperated with Forschungsgruppe Wahlen ("Election Researchgroup") to conduct demoscopic analyses. Their latest findings (from last Friday), show that Schröder personally is still popular, and beats Stoiber 59% to 34% in a straight popularity contest. If you click on that page on the "Bildergalerie" on the right, you will be taken through a series of graphs with poll results. One shows that the public is slightly more satisfied with the government (+0.5) than the opposition (+0.4). In part this is no doubt due to the pandering to the anti-Americanism in the population.

But there is another effect too: the floods that ravaged Germany a few months ago probably saved Schröder's bacon. To pay for the rebuilding, the tax reform has been postponed, and this has allowed the SPD to catch up on the crucial issue of economic competence. The CDU/CSU still has a slight lead (33 to 30), but that's down from 34 to 24% a week ago. On the creation of jobs, the lead is now 35 to 29%, down from 37 to 26%.

There is a lot of disappoinment and resentment in Germany about the poor economic performance. But none of the political parties, aside from the occasional flutter from the FDP, has a plan to attack the causes of the economic sclerosis. It's all just tinkering at the margin. The labor unions are still locked into antediluvian economics; they argue they need huge wage rises so that domestic demand be stimulated. To propose true free market reforms is political suicide. And the capacity to put up with economic mismanagement is cultural. Some cultures rebel, others plod along. Witness Japan, which has been in a slump for over a decade now. Germany is headed down the same path. The pain will have to become much greater before true reforms stand a chance.

Referring to the labor market, Schröder once famously said that he doesn't want "American conditions" to prevail in Germany. I take that to mean that he prefers 10% unemployment to 5%. Perhaps he'd care to explain that the 2 million extra unemployed. And this is before taking the average length of unemployment into account, which is much higher in Germany than in the US.

My prediction: much as I hate to say it, the ruling Red/Green coalition is going to squeak in by a thin margin on Sunday.