Merkel's party holds slim lead before state vote

Chancellor Angela Merkel's centre-right coalition holds a narrowing one-point lead over the centre-left opposition in Baden-Wuerttemberg one month before the key state election, according to a poll published on Monday.

The March 27 election in Baden-Wuerttemberg, where the CDU has ruled since 1953, has increased Germany's resistance to raising the size and scope of the euro zone bailout fund, which is expected to be agreed at a March 24-25 European Union summit.

Any perceived relaxation of debt terms for euro zone stragglers is a sensitive political subject in Germany.

In Baden-Wuerttemberg, the most important state vote this year, Merkel's Christian Democrats (CDU) were projected to win 40 percent in the Emnid poll, unchanged in the week, while the Free Democrat coalition partners fell 1 point to 6 percent.

The opposition Social Democrats (SPD) climbed 3 points to 23 percent in the wake of their crushing victory over the CDU in a state election in Hamburg last Sunday. Their preferred partners, the Greens, slipped one point to 22 percent.

The CDU/FDP coalition thus holds a slim 46-45 percent lead over SPD-Greens. The Left party -- not likely to be a coalition partner -- dropped 1 point to four percent in the Emnid poll and would thus fail to clear the five-percent threshold needed for seats in the state assembly.

The CDU also faces the loss of power in Saxony-Anhalt in an election on March 20.

Germany has already said it will only agree new measures if they come as part of a comprehensive package to solve the crisis -- code for indebted states taking aggressive steps to, among other options, cut back on public spending and cap wage growth.