Eurozone Crisis Hits German Election Campaign

Less than a month before German elections, the eurozone crisis has entered the campaign battle, giving the opposition badly needed ammunition for an attack against popular Chancellor Angela Merkel.

"This naturally spells a certain risk for the conservative Merkel, because so far the Germans have felt their savings were secure" despite the crisis, said Lothar Probst, a political scientist at Bremen University.

The issue flared up a week ago when Finance Minister Wolfgang Schaeuble admitted during an election event that Greece would need another rescue from 2014, seen as marking a shift in Berlin's position.

"Schaeuble confirms what everyone knew," headlined the top-selling Bild daily, ever ready to defend the taxpayers of Europe's largest economy and biggest eurozone paymaster.

For the Social Democratic Party (SPD) and Green opposition, the confession by a Merkel loyalist was a godsend.

Much of Merkel's huge popularity has been due to the perception in her country that she has managed the eurozone crisis prudently, looking after the German public purse.

For months she has enjoyed a personal poll lead of nearly 30 points over her Social Democratic rival Peer Steinbrueck, who was her finance minister in a 2005-09 "grand coalition" government.

The former SPD chancellor Gerhard Schroeder, who lost to Merkel in 2005 elections, was quick to denounce her great "lie".

SPD president Sigmar Gabriel chimed in: "It will be like when (conservative) chancellor Helmut Kohl promised that German reunification wouldn't cost anything. The worst is yet to come."

Steinbrueck promised, in an interview published Monday, that he would pin down Merkel's position on the issue next Sunday in their only television debate ahead of the September 22 election.

He accused the coalition government of Merkel's conservatives and the Free Democrats of having "distributed sleeping pills and trying to hide the fact that stabilizing the eurozone will have a cost".

Meanwhile, the conservatives have tried to extinguish the fire which Schaeuble set either knowingly or by accident.

The finance minister has meanwhile insisted that the third European Union and International Monetary Fund program of assistance for Athens would be "much smaller" than the previous two.

The first, in May 2010, consisted of loans of 110 billion euros, while the second, passed in February 2012 and in place until July 2014, provided the crisis-stricken country with 140 billion euros, plus a controversial write-off of sovereign debt.

Greek Finance Minister Yannis Stournaras said Sunday that if a third bailout was needed in 2014, it would be worth around 10 billion euros and would not be contingent upon new austerity measures.

Merkel has said that Greece's debt and structural reforms would again be studied in 2014, as planned.

"I will certainly not weaken the incentive for Greece to implement further necessary reforms by commenting now on the outcome of a program that is set to run for another year," she told the Tuesday edition of the Saarbruecker Zeitung.

Like Schaeuble, she has insisted there will be no new 'haircut', warning that another Greek debt write-down could spark a "domino effect of uncertainty" and scare off investors in the eurozone.

SPD economics expert Carsten Schneider charged that Merkel and Schaeuble are wrong to claim that no decision is due until 2014, saying: "They won't be able to support this position, and they both know it."

Despite the war of words, the effect on the polls has so far been limited in the election race, where the future of the eurozone has not figured prominently.

According to a poll published Sunday, the conservatives and their junior partners would get a total of 45 percent, against a combined 37 percent for the SPD and their preferred allies the Greens.

"I have the impression that this debate has had little effect on voters. This is mainly due to the fact that the German economy is still doing well, with good exports," said Nils Diederich, a political scientist at Berlin's Free University.

In addition, the SPD and Greens have never fundamentally opposed the decisions of the Merkel government in tackling the eurozone crisis.

Danger could still come from the anti-euro party Alternative for Germany (AFD) created this year, which may take votes from the conservative base.

In Sunday's poll, the AFD gained to three percent, still below the five percent threshold to enter parliament.

The Greens' candidate Juergen Trittin accused Merkel, in comments in the Osnabruecker Zeitung, of avoiding debate on Greece because of her "panic" about losing votes to the fringe party.