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UPDATE 1-Merkel and challenger clash in east Germany

Published 09/15/2009, 02:47 PM
Updated 09/15/2009, 02:51 PM
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* Steinmeier derides Merkel's cross-country train trip

* New poll gives Merkel centre-right majority she wants

* SPD minister says new coalition with Merkel not so bad

(Recasts with Steinmeier, poll, Steinbrueck coalition comment)

By Erik Kirschbaum

ERFURT, Germany, Sept 15 (Reuters) - German Social Democrat (SPD) leader Frank-Walter Steinmeier stepped up his attack on Chancellor Angela Merkel at a rally on Tuesday as a poll showed her on track to form the centre-right government she is seeking.

Her challenger Steinmeier, hoping to build on momentum from his strong performance in a Sunday TV debate, said Merkel and her conservatives would be punished by voters in a Sept. 27 election for sitting on a poll lead and dodging tough issues.

He derided a cross-country campaign trip by Merkel on a vintage 1950s train used by West Germany's first post-war chancellor Konrad Adenauer as a fitting metaphor for the direction she wants to take Germany -- "backwards".

Merkel's train made a brief stop in the eastern city of Erfurt only an hour before Steinmeier appeared there.

"Frau Merkel was here today but did she offer even a single idea on how to lead us out of the crisis?" Steinmeier asked the crowd of 1,300 in a central town square after 500 listened to Merkel's 15-minute speech in front of the nearby rail station.

"She's on a nostalgic trip in Adenauer's train. I'm sure she's having a jolly time. But riding around in an old train on a nostalgic trip is the wrong way to lead our country and the voters are going to let her know that on Sept. 27."

Merkel's conservative Christian Democrats (CDU) and their Bavarian sister party, the Christian Social Union (CSU), hold a double-digit lead in polls and a new poll showed on Tuesday that they have enough support to form their coalition of choice with the business-friendly Free Democrats (FDP).

But her party has grown nervous after her mixed performance in the TV debate and because of their late meltdowns in both 2002 and 2005, when the centre-left SPD rallied from far behind.

Any weakening in support over the final weeks of the campaign could doom her chances of sealing a coalition with the FDP, a partnership which would seek to cut taxes and reverse a planned phase-out of nuclear energy in Germany.

GRAND COALITION

Should she fail to form a centre-right government, the most likely option is another awkward "grand coalition" with the rival SPD.

At train stops in Erfurt and Koblenz, Merkel used the anniversary of the Lehman Brothers bankruptcy to attack bankers, tapping into popular resentment at those blamed for the crisis.

"We must make sure that the bankers of this world can never again get up to such things at our cost," Merkel told reporters on the 12-hour train ride in honour of Adenauer, who was elected 60 years ago.

As she travelled through Germany aboard the slow-moving "Rheingold-Express" Merkel tried to draw comparisons with Adenauer, the man who presided over Germany's economic miracle of the 1950s.

Meanwhile, in a potential embarassment for the SPD, one of its leading politicians broke ranks and said in an interview that forming another "grand coalition" with Merkel after the election would not be so bad.

In a video interview with Stern magazine, Finance Minister Peer Steinbrueck went on to suggest that such a coalition would be the only way for the SPD to remain in power -- a tacit admission that they have no chance of forming a majority coalition with any other parties.

The SPD went into damage control mode after Steinbrueck's comments were published, issuing a statement in which they made clear the party was "not seeking a grand coalition".

(Editing by Noah Barkin)

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