German Chancellor Gerhard Schroeder clashed conservative challenger Angela Merkel on economic reform policies in a widely-watched nationally televised debate on Sunday.

He accused Merkel of her tax system, saying it was "unjust", saying her plans to cut supplementary payments for night shifts and holidays.

In the only TV debate before the Sept. 18 national elections, Schroeder said it would disproportionately hurt low earners such as nurses working night shifts.

"Your finance concept is truly built on sand," he said, warning that Merkel's tax system would boost budget deficits, while defending his plan for a three percent tax surcharge on the rich.

Schroeder criticized Merkel for unfairly cashing in on an economy that is improving due to his economic reforms.

"What you're saying about the economy overlooks that Germany has become the world's top exporter in the last three years. That is because of our structural reforms."

In defending her tax system, Christian Democratic Union (CDU) leader Merkel said that her objective was to get rid of all tax loopholes and subsidies in order that everyone could pay a fair tax.

Schroeder also reaffirmed his foreign policy stance against the Iraqi war, saying, "It's a policy which has positioned Germany as a medium power."

Merkel insisted that "Germany can only be a strong, reliable partner in the world if we are economically strong," pledging that curbing unemployment would be her top priority if she wins the election.

The 90-minute debate is the only one to be held before the Sept. 18 election as the two parties finally compromised after hard talks. Schroeder had insisted two televised debates with each lasting 60 minutes, but Merkel had stuck to one.

Media-savvy Schroeder is expecting that the debate would give him a boost, as a similar debate did in 2002 campaign when he came from behind to overtook conservative chancellor candidate Edmund Stoiber and reelected.

Polls show that Schroeder's Social Democratic Party (SPD) and its junior partner, the Greens, have been trailing far behind Merkel's Christian Democratic Union (CDU/CSU) alliance only two weeks before the election.

The debate is part of the candidates' campaign for the early election, called by Schroeder in May when the SPD lost in a crucial state election in stronghold North Rhine-Westphalia due to unpopular economic reform policies including curbing jobless welfare.

This is the third televised debate between chancellor candidates in the German history and expected be viewed in nearly 20 million households.

A N-24 TV poll released over the weekend showed 59 percent of Germans said that Schroeder would win the debate, with only 24 percent expecting Merkel to win.

But that does not mean he would win the final election as the ZDF network survey showed Schroeder's SPD/Greens coalition netted only 39 percent of the vote, while Merkel's CDU/CSU and their Free Democratic Party obtained 50 percent.

Source: Xinhua