GMF - The German Marshall Fund of the United States - Strengthening Transatlantic Cooperation

The incumbent campaigning for re-election in this weekend's German election is one of his party's heavyweights, an ambitious and confident bruiser with a talent for scorching populist rhetoric. His challenger is a woman, a diffident speaker in a party with few women in top leadership positions; her peers would mostly have preferred another man as their candidate. It seemed an easy win for the incumbent. Now, polls show the race is too close to call.

Déjà vu? Yes, but through the looking glass: in 2005, the woman who bested the Social Democrat chancellor, Gerhard Schröder, was a Christian Democrat, Angela Merkel. In this Sunday's contest between Roland Koch, minister-president, and Andrea Ypsilanti in the western state of Hesse, the party affiliations are reversed and the Christian Democratic Union could suffer its first electoral setback in six years. This state election, one of four this year, has become not just a test of nerves but a national bell-wether: for Ms Merkel's tenure as chancellor of a fractious grand coalition of the former rivals, the CDU and SPD, but possibly for the future of German party politics too.

Mr Koch's drop in the polls is selfinflicted and instructive. A decade ago, when conservative politicians were still saying Germany would "never be an immigration country", he raked in votes with a signature campaign against dual citizenship. This time, he zeroed in on juvenile crime among migrants and demanded harsh res-ponses, including deportation and pri-son for under-14s. But attitudes have changed: Mr Koch embarrassed his chancellor, who has been leading a bipartisan move to modernise Germany's immigration policies. Worse, the voters were unimpressed.

Some of Ms Ypsilanti's recent popularity comes from a wit and unpretentious charm that voters find (more echoes of 2005) refreshing. But the main lesson from her rise is as simple as it is disturbing: the SPD's shift to the left is working. Ms Ypsilanti (the name itself is a signpost of migration, a memento of a Greek husband from whom she is long divorced) was one of the most outspoken critics of Mr Schröder's Agenda 2010 labour-market reforms. Then, he dismissed her as "that Ms XY"; today, her anti-liberalisation views are the party line.

For Kurt Beck, the SPD's national chairman, all this comes as a great relief. He has been compelled to steer the party towards the left, squeezed on one side between a CDU that, having nearly lost the federal elections with a brash reform programme, ruthlessly reinvented itself as cautiously centrist, and the radically anti-reform Left party on the other. The effect on his and the party's poll ratings was nil until now.

Latest polls show the Left party on the brink of achieving its desired toehold in western Germany: 6 per cent in Hesse on Sunday and 5 per cent in the vote in Lower Saxony on the same day, enough to squeeze into the state assemblies and to throw a spanner into the coalition calculations of all other parties. The Left party, with national ratings at 10-12 per cent, is anathema to the leaders of Germany's established parties, because of its roots in the East German Communist party and the (often German Democratic Republic-funded) radical subculture of pre-1989 West Germany, its excoriation of globalisation and America, as well as a leadership with its own line in sulphurous populism. But its chief sin is that its anti-modernising stance has large numbers of sympathisers across the political spectrum - including in the party ranks.

Ms Merkel's coalition has defied predictions of an early break-up. It has balanced Germany's budget, accomplished some domestic reforms, handled the double European Union and Group of Eight presidencies with aplomb, and disciplined the party warlords (including Mr Koch), with the chancellor acting as a mediator rather than a driver of policy.

Lately, though, the strain has been showing. The reform agenda for the period until September 2009 is minimal. Acrimonious spats over foreign policy are on the rise. Most worryingly, Ms Merkel's government has proven susceptible to pressures from the left, too, as seen in the decision to apply a postal minimum wage. To stay the course, regardless of Sunday's outcome, will take nerve. But if the coalition parties decide to wade into a populist battle, this vote could be the herald of profound political and social divisions - taking us far into Looking-Glass Land.

The writer is the director of the German Marshall Fund's Berlin office; the opinions expressed here are her own