There’s more to think about in Germany than the odd neo-Nazi being turned back by Australian immigration. With only three weeks to go, the forthcoming election on 19 September has been getting plenty of coverage, even in the Australian media, as with this report by James Button in The Age and in this morning’s Australian.

Incumbent chancellor Gerhard Schroeder isn’t ready to be counted out yet, despite the fact that his political obituaries were being written months ago. He came from behind to win the last election, in 2002, on the strength of his opposition to the Iraq war. If he can do it again, it will be one of the great political comebacks.

There are five parties that will be represented in the new German parliament. From right to left, they are the opposition Christian Democrats (CDU), the Liberals (FDP), the governing Social Democrats (SPD), their coalition partners the Greens, and the Left Party of ex-communists and SPD defectors.

The key question is whether the first of these two will have a majority of seats between them. The opinion polls have had them well in front for a long time; and while their lead has been slipping, at present they are still hanging on to a majority. If that holds, they will form a coalition government, and CDU leader Angela Merkel will become Germany’s first female chancellor.

But if the CDU-FDP combination falls short, things will get interesting. Neither major party will go into coalition with the ex-communists, so there seem to be three possibilities. There could be a minority SPD-Greens government with the tacit support of the Left Party; or a grand coalition between the CDU and the SPD, locking out the smaller parties; or the FDP could switch sides (as it has done before) and combine with the SPD and Greens to provide a majority.

Most participants agree that Germany is in need of fairly major economic reform, but it is an open question which side is better placed to offer it. Schroeder’s reforms so far have been minor, but enough to earn him plenty of popular ill-will. The CDU, like John Howard here in 1996, seems to be playing both sides: promising further reform, but capitalising on the unpopularity of what has already been done.