BRUSSELS: Germany’s high-wire general election battle between Gerhard Schroeder and Edmund Stoiber is being anxiously watched by its EU partners, who are contemplating how key issues would be handled by a new chancellor in Berlin.

Officially, member states and the European commission will not comment on a fight, the outcome of which could affect issues including war on Iraq, euro-zone budget rules, economic liberalization and the financing of EU enlargement.

But it is no secret, for example, that a re-elected Social Democratic chancellor running the union’s largest member and main paymaster would provide Tony Blair with an easier colleague than Stoiber, the conservative challenger from Bavaria. The chancellor’s habit of challenging Brussels, especially on economic issues, has been welcomed by Britain.

With the European centre-left now running just four out of the EU’s 15 governments, despite last week’s success for Sweden’s Goran Persson, Berlin is a vital outpost for the Social Democrats to retain.

But the French president, Jacques Chirac — who ended his “cohabitation” with his Socialist prime minister, Lionel Jospin, in the summer — much prefers Stoiber, a Bavarian Christian Democrat. Old spats between Chirac and Schroeder are part of the story.

But Stoiber is also the choice of the Elysee because he gives greater weight than the incumbent to the old Franco-German axis, and because he cares about farmers and their subsidies, a subject close to the French heart. It is Germany’s EU policies rather than ideological colour that matter most in Brussels and beyond.

Denmark, holder of the EU’s rotating presidency, is desperate for a swift conclusion to the coalition talks that will follow Sunday’s election, because the campaign has meant a virtual paralysis on all the dossiers it is handling.

The biggest of these issues is financing the enlargement of the union. December’s Copenhagen summit may admit up to ten new members.

Another area of concern is the hyper-sensitive item of farm subsidies. Germany, as well as Britain, the Netherlands and Sweden, seeks a reform of farm subsidies before newcomers join. France and others oppose this.

Denmark is also worried about Turkey — a key player in the complex enlargement endgame on the application by Cyprus — because of Stoiber’s anti-Turkish views.

Boosting relations between Berlin and Paris matters too. “It’s very important to get the Franco-German alliance back on the road,” a well-placed eurocrat said. A victory for Stoiber might be easier for the European commission because Schroeder has often indulged in the familiar sport of Brussels-bashing, picking fights about economic liberalization and the preference given to the service sector over Germany’s still weighty industrial sector.

But a re-elected Schroeder might temper his views if he formed a coalition with the Liberal Free Democrats.

European officials recognize that transatlantic ties might be better served by Stoiber, after the chancellor’s recent strong opposition to a US-led war on Iraq weakened the already remote possibility of achieving a united EU position on the crisis. —Dawn/The Guardian News Service.