German left hopes to slow Merkel's momentum in key state vote

* State test of voter sentiment 8 months before federal vote

* Popular Merkel-ally "Mac" may lose power despite strong

* SPD, Greens hope victory will slow Merkel drive for 3rd

By Noah Barkin

BRAUNSCHWEIG, Germany, Jan 7 (Reuters) - A decade and a half
ago, Gerhard Schroeder's resounding victory in a state vote in
Lower Saxony gave his Social Democrats (SPD) the momentum they
needed to seize power in Germany after 16 long years of
conservative rule under Helmut Kohl.

The SPD is hoping for a similar game-changing win on Jan. 20
when voters in the large western region go to the polls again,
just eight months before Germany holds a federal election.

But this time, even if they do manage to defeat the state's
conservative premier David McAllister, a rising star in
Chancellor Angela Merkel's Christian Democrats (CDU), it will be
tough to translate that success into victory in September, as
they did in 1998.

Instead of an ageing Kohl to contend with, the SPD is up
against his former protege Merkel, whose defence of German
interests during the euro zone's debt crisis has made her the
most popular politician in the country.

And in place of the charismatic Schroeder, who was anointed
Kohl's challenger after his big win in Lower Saxony, the party
is now pinning its hopes on Peer Steinbrueck, an acerbic former
finance minister whose campaign to unseat Merkel has had a
disastrous gaffe-filled start.

"It is a must-win for the SPD if they want to have any hope
of beating Merkel in the autumn," said Gero Neugebauer, a
political scientist at the Free University in Berlin. "It will
be likened to Schroeder's victory in 1998 if they come out on
top. But today's landscape is very different."

Bigger than the Netherlands, with which it shares a border,
Lower Saxony is Germany's second-largest state by area,
stretching from the North Sea to the edge of what used to be
communist East Germany.

It is home to carmaker Volkswagen and hundreds of
"Mittelstand", small-to-medium sized companies that form the
backbone of Europe's largest economy.

The state has been a stepping stone to national power.
Schroeder's successor as state premier Sigmar Gabriel is now
leader of the SPD. The conservative who replaced him, Christian
Wulff, rose to become German president before a financial
favours scandal brought him down last year.


McAllister, the 41-year-old son of a Scottish soldier who
plays on his heritage in a tongue-in-cheek way -- his campaign
video features bagpipe music -- has run the state since Wulff
left in 2010 and emerged as its most popular politician.

A recent poll showed 64 percent of voters view him
favourably, compared to just 33 percent for his regional SPD
rival, Stephan Weil, mayor in the state capital Hanover.

Yet he may still lose power.

If his current ruling partner, the Free Democrats (FDP),
fails to make it into the state assembly, McAllister could be
booted out of office by a coalition of the SPD and Greens even
though the CDU seems sure to emerge as the strongest party.

A poor showing by the FDP, who are also Merkel's coalition
partners in the national government, would likely lead to the
ouster of the party's embattled national leader Philipp Roesler.

At a rally in the city of Braunschweig on Saturday, where
5,000 CDU supporters waved "I'm a Mac" signs, concern about FDP
weakness costing the CDU victory in Lower Saxony was evident in
speeches by McAllister and Merkel, who is making eight campaign
trips to the state.

"We Christian Democrats are clearly the strongest party,
well ahead of the SPD," McAllister said. "And the FDP are on the
rise. They stand at four percent in the polls. They can get to
five percent or more, it is possible."

Ousting the popular Merkel ally months before the federal
vote despite coming in a distant second would have powerful
symbolism for the SPD. Their only hope of defeating Merkel
herself may hinge on a similar outcome.

At the very least, SPD officials believe victory in the
state will lead Germans to question the seeming inevitability of
a Merkel third term.

After a string of CDU losses in other states over the past
year, it would also give the SPD and Greens a majority in the
Bundesrat upper house of parliament, meaning they could block
Merkel's policy initiatives and launch legislation of their own.

Still, leveraging a regional win into a "Red-Green" majority
in September seems unlikely. That's because the SPD is polling
6-7 points weaker nationally than it is in Lower Saxony.

"A lot would have to happen for the SPD and Greens to win a
majority in the federal vote. It's very hard to foresee this
scenario," said Manfred Guellner, head of pollsters Forsa.

"Back in 1998 people wanted change. Kohl had ruled for 16
years and the CDU was seen as incompetent. That's just not the
case anymore."