Germany's highest court cleared the way on Thursday for an early election on September 18 that polls show will oust Chancellor Gerhard Schroeder and bring in a conservative government led by Angela Merkel.
Responding to a challenge by two parliamentarians, the Federal Constitutional Court voted 7-1 that President Horst Koehler had acted correctly in dissolving parliament last month and calling the election one-year ahead of schedule.
Schroeder himself had called in May for the vote to be brought forward, in hope of a new mandate for his economic policies after his Social Democrats (SPD) lost a regional election in their long-time stronghold of North Rhine-Westphalia.
But two rebel deputies in his coalition argued that a July 1 confidence vote the chancellor pushed for and then deliberately lost to force an early election violated the constitution.
They challenged Koehler's decision to endorse Schroeder's confidence vote, leaving the court with the final say.
"We have reached a clear verdict," presiding judge Winfried Hassemer told the court in a ruling carried live nation-wide on all major television stations.
"The decision by the President to dissolve parliament and fix elections for September 18 is not in conflict with the constitution."
Opinion polls suggest the SPD will lose the election to the conservative Christian Democrats led by Merkel, an easterner who would become Germany's first woman chancellor.
She is advocating reform of Germany's tax system and labour market in order to boost growth and cut unemployment, which stands near a post-war high.
Germany's constitution, framed after World War Two with the political instability of the pre-war Weimar Republic in mind, makes it difficult to dissolve parliament before the end of a regular four-year term.
But with all the country's leading political parties in favour of elections and the campaign now in full swing, the court had not been expected to disrupt the early vote.
In 1983, the last time the court was called on to make a similar ruling, it upheld the then-president's decision to allow an early election even though the chancellor, Helmut Kohl, had a comfortable majority.
It is the fourth time in post-war German history that elections have been brought forward. The last time was in 1990 in response to German reunification.
"The court's decision ushers in the last crucial phase of campaigning," said Wichard Woyke, a political scientist at Muenster University.
Andreas Rees, an economist at German bank HVB Group said that if the court had blocked the election it would have led to political gridlock with "severe negative consequences for financial markets and the general economic outlook".
In pushing for early elections, Schroeder said he needed a fresh mandate to continue his programme of economic reforms.
He argued that he lacked support in parliament and within his own party to push on with measures that have restructured Germany's welfare state but failed so far to make a serious dent in unemployment.
"Now it is clear than on September 18 German voters will choose a new parliament. This was my goal from the very beginning," Schroeder said after the court ruling.
Merkel's conservatives have pledged to go further than Schroeder in reforming Europe's largest economy. They want to raise sales tax to fund a lowering of non-wage labour costs, loosen rules on firing people and cut income tax.
On the foreign front, the conservatives and their preferred allies, the liberal Free Democrats, are vowing to improve strained ties with the United States.
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