Ex-finance minister to challenge Merkel in 2013

[September 28, 2012]  BERLIN (AP) -- Germany's main opposition party is set to nominate former Finance Minister Peer Steinbrueck, who helped pilot the country through the 2008-9 financial crisis, as Chancellor Angela Merkel's challenger in elections next year.

Officials with the center-left Social Democrats wouldn't immediately confirm reports Friday in several German media outlets that the leadership had decided on Steinbrueck, 65. But the party scheduled an afternoon news conference and former Cabinet colleague Brigitte Zypries wrote on Facebook: "it's true, it's going to be him."

The choice of Steinbrueck -- one of three candidates who has been discussed for months as criticism mounted of the party's failure to settle on a challenger -- kicks off in earnest the race for the chancellery in parliamentary elections expected this time next year.

Steinbrueck earlier this week presented a plan for "taming financial markets," flagging that as a prominent issue in the party's campaign.

But polls suggest that, while Steinbrueck is relatively well-placed to attract swing voters, the Social Democrats face an uphill struggle to unseat the popular Merkel, 58, Germany's leader since 2005.

The party consistently trails her conservative Christian Democrats, and surveys show no majority for their hoped-for coalition with the Green party.

They're keen to avoid ending up as Merkel's junior partner in another "grand coalition" of right and left, the combination in which Steinbrueck served as finance minister from 2005 to 2009.

A significant source of Merkel's popularity is her handling of the eurozone debt crisis, and that's been making it hard for the Social Democrats to land blows on her. They and the Greens have criticized Merkel for what they decry as a too-little, too-late response -- before invariably supporting her plans in Parliament.

Steinbrueck has a reputation for plain speaking, which hasn't always made him popular with fellow Social Democrats. As a minister, he once remarked of his party that "we're coming over to people as crybabies" in the face of Merkel's popularity.

In 2009, he called for governments to use "the whip" against neighboring Switzerland in the fight against tax evasion and said the Alpine nation faced the threat of the "cavalry."

His successor, Wolfgang Schaeuble, has taken a more diplomatic approach, negotiating a deal with Switzerland. But with the election in sight, the Social Democrats have vowed not to let it through Parliament's upper house, where Merkel's coalition lacks a majority.

[Associated Press; By GEIR MOULSON]

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