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Chancellor Angela Merkel’s party fell to the lowest poll rating of the campaign just 48 hours before the vote, throwing into doubt her favored coalition and plans to cut taxes, push deregulation and extend the life of nuclear-power plants.

While the Forsa poll today showed Germany’s first female chancellor headed for re-election on Sept. 27, her Christian Democrats fell 2 percentage points to 33 percent, sending the combined score with the Free Democrats, her preferred ally, down to 47 percent. Foreign Minister Frank-Walter Steinmeier’s Social Democrats slid a point to 25 percent.

“It’s going to be a thriller,” Peter Loesche, a political scientist at Goettingen University, said in a phone interview. “It’s 50-50. A shift of two or three percentage points to the Social Democrats and you could get a situation like 2005,” when Merkel’s lead was whittled away in the final week, forcing her into a coalition with her Social Democratic rivals.

After four years of coalition compromise, Merkel and Steinmeier, her Social Democratic foreign minister, are offering competing visions of how best to generate growth in Europe’s largest economy. Merkel favors across-the-board tax cuts of 15 billion euros ($22 billion) that Steinmeier says Germany can’t afford. He favors a minimum wage and wants to raise the top tax rate to 47 percent from 45 percent.

‘Really Change Things’

“A Merkel coalition with the FDP could really change things in Germany,” said Fredrik Erixon, director of the European Centre for International Political Economy in Brussels. “It would allow many reforms that the Social Democrats have blocked,” such as pruning the bureaucracy. “But it’s still a tight race.”

The Christian Democrats and their Bavarian sister party, the Christian Social union, fell to their lowest in the regular Forsa poll since March, when the government was discussing plans to seize Hypo Real Estate AG. The Free Democrats gained 1 point to 14 percent, giving the allies their lowest combined tally since October.

The Left Party rose 2 points to 12 percent and the Greens declined 1 point to 10 percent. Forsa polled 2,001 voters on Sept. 21-24. The results have a margin of error of as many as 2.5 percentage points.

Schroeder’s Haul

Merkel, 55, is seeking to avoid a repeat of 2005, when then-Chancellor Gerhard Schroeder hauled the Social Democrats back into contention after trailing by as many as 20 points. This time, at least a quarter of the electorate is undecided, prompting a fight for voters in the final hours of the campaign.

Steinmeier, 53, buoyed by a Sept. 13 televised debate that viewer polls suggested he won, stumped at the Brandenburg Gate in Berlin today and in Dresden tomorrow before wrapping up in Detmold, his hometown, in a date added to his schedule yesterday.

Merkel, who is attending the Group of 20 summit in Pittsburgh, returns to Germany tomorrow and heads straight to her last rally, at a Berlin concert hall. Her supporters are hitting the phones and going door to door to try and reach an estimated 1.5 million voters and bolster turnout.

An alliance with the Free Democrats “can best steer a way out of the economic slump to growth and employment,” Merkel told the Frankfurter Rundschau newspaper yesterday. A grand coalition “should remain the political exception.”

Nuclear Plans

Merkel wants to extend the lifespan of nuclear-power plants by as many as 15 years, while Steinmeier backs a law he helped negotiate as Schroeder’s chief of staff that will shut them by about 2021. At stake are stations run by Dusseldorf-based E.ON, RWE AG of Essen, Sweden’s Vattenfall AB and Karlsruhe-based EnBW Energie Baden-Wuerttemberg AG that generated 23 percent of Germany’s electricity last year.

Steinmeier says that a CDU-FDP coalition would trim social- welfare programs, widen the rich-poor gap, and make it easier to fire workers. They’d promote “the old greed,” he said at a Sept. 15 rally in Erfurt. He pledges 4 million new jobs, partly by promoting green technology.

Merkel and the Free Democrats “still don’t get it,” Steinmeier said in an entry on his blog posted Sept. 23. “In an election campaign it’s not about tactical games and pretty pictures. The people want to know what ideas we have for the future of our country.”

Exports Slumped

Germany, the world’s biggest exporter, was worse hit than other Group of Seven economies as the global recession hurt foreign sales of Munich-based Siemens AG machinery and Wolfsburg-based Volkswagen AG cars. Gross domestic product unexpectedly grew by 0.3 percent in the second quarter, ending Germany’s recession.

Merkel and Steinmeier agreed to spend 85 billion euros on economic stimulus programs, set up a cash-for-clunkers program that boosted car sales and crafted a 102 billion-euro government-backed rescue for Munich-based lender Hypo Real Estate AG.

Both of them lobbied successfully for General Motors Co. to accept Magna International Inc.’s bid for GM’s Opel unit, which is based in Ruesselsheim.

“The grand coalition has been better than most people have claimed,” Eberhard Sandschneider, director of studies at the German Council on Foreign Relations in Berlin, said in an interview. “Merkel is well-suited to lead such a government again if that’s the result on election day.”

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