Germany Votes: Merkel In Close Election Race

Voting is under way in the German election with Angela Merkel set to win a third term as Chancellor - but who she will be in government with remains in contention.

Polls show her current coalition partners are in a neck-and-neck race with an alliance of opposition groups.

Should Ms Merkel win a third term, she will become Europe's only major leader to remain in power throughout the financial crisis.

After shepherding Europe's top economy through the debt turmoil, she has emerged more popular than ever due to her motherly reassurance as the crisis toppled leaders in France, Greece, Italy and Spain.

Pollsters suggest that voters will re-elect the 59-year-old, whose nickname "Mutti" ("Mummy") can seem incongruous with her other often-used description as the world's most powerful woman.

Ms Merkel and her main rival Peer Steinbrueck

But who Ms Merkel will form a government with remains in play.

"Rarely was it so close. Merkel's coalition only has a razor-thin majority in the polls," the Sueddeutsche Zeitung daily newspaper reported ahead of the poll.

Ms Merkel has boasted that her current centre-right coalition has been Germany's most successful since reunification in 1990, enjoying a robust economy and a jobless rate of less than 7%.

But her stated aim for her conservative Christian Democratic Union (CDU) to stay in power with its junior partners, the pro-business Free Democratic Party (FDP), hinges on the smaller party's unpredictable fortunes.

Gero Neugebauer, a political scientist from Berlin's Free University, said: "The continued governing by this coalition remains uncertain."

Ms Merkel is expected to claim a third term as German Chancellor

If the alliance fails to rally a ruling majority, Ms Merkel could be forced back into the arms of her traditional rivals, the Social Democrats (SPD), with whom she governed in a "grand coalition" during her first term. 

Under the watchful eye of Germany's European partners, a new party, the Alternative for Germany (AfD), could also prove a wild card.

Ms Merkel's main opponent Peer Steinbrueck of the SPD stepped up his attacks on the Chancellor in the final stages of the campaign, accusing her of leading an inept government incapable of dealing with the debt crisis.

While the German leader has been demonised abroad for her approach to the euro crisis, it has been bread-and-butter issues which have dominated the election campaign.

Tax, child benefits, healthcare and pensions have all trumped the euro crisis and foreign policy on the campaign trail.

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