Schroeder was all but counted out as recently as a few weeks ago. But the chancellor has staged a comeback with a series of highly emotional speeches in which he called on Germans not to sacrifice social solidarity in the name of economic reform.
"In order to help himself and his family everyone must do the following. Everyone has a duty to himself and [also] to the greater community. And when a person cannot help himself -- because he's too young, too old, too sick, or unemployed -- that's when the solidarity of the society [steps in to help]," Schroeder said at a weekend rally in Berlin.
Those words were clearly aimed at Merkel' proposal to reduce Germany's generous social benefits in order to revive the economy. Polls say Germans acknowledge the country's social benefits need to be cut, but many are also fearful that the reforms will go too far.
In recent days, Merkel has softened her rhetoric, balancing calls for economic reform with assurances that no one will be left behind. Yesterday, she said she wanted a society in which everyone would be better off.
"We can do it better. I am fully confident of that," Merkel said. "Just as we set up Germany and German reunification, we can once again turn Germany into a successful country in the 21st century so that each and every one is better off again. That's what I would like to work toward and that's why I need your support."
At a polling station in central Berlin on this morning the voting was steady, and turnout was expected to be high.
Ilse, a retired shop clerk in her late 60s, is a strong supporter of Chancellor Schroeder's SPD. She said she's always voted SPD and did so again today.
"[It's simple.] Because for me [the SPD] was better than what is going to come," Ilse said.
Andrea, who is in her 30s, arrived at the polling station with her children, friends, and dogs. She said it's time for a change and that she's lost her trust in Schroeder. She's voted CDU.
"I trust, for example, Frau (Angela) Merkel," Andrea said. "She will do what she says. She wants to. She not only promised to makes changes but I think she also wants to. And this is [what was missing with the other parties.]"
Kurt, a computer salesman in his mid-20s, arrived at the polling station on his bike – eager to cast his vote for Schroeder's SPD. He said he values experience -- something he said the CDU lacks.
"For me, competence is the most important thing," Kurt said. "For me, I am of the opinion that the CDU is [not ready yet] to guide our country."
He conceded that the CDU will probably win.
"I hope that our government will stay in power, but it looks now as if it's going a little bit better for the CDU," Kurt said.
The latest polls suggest Merkel's CDU and the party's traditional allies, the Free Democratic Party (FDP), will win anywhere from 46 to 51 percent of the vote. A result of around 48.5 percent would be enough to control the federal parliament.
Schroeder's current ruling coalition, linking the SPD and the Greens, is unlikely to win a majority. The coalition could still obtain a majority by including a new left-of-center party, Die Linke (the Left) -- a group of former communists from eastern Germany and disgruntled former SPD members. Schroeder, however, has already ruled that out.
Another possibility is a grand coalition. Observers say that outcome might make the most sense, since the reform plans of both major parties are broadly similar.
But Merkel has downplayed that possibility, saying a grand coalition would only lead to stagnation.
"I know that there are many people who are thinking: 'perhaps a grand coalition could solve the problems of this country,'" Merkel said. "Ladies and gentlemen, I am telling you now just as I've told the men and women of this country, a grand coalition would [lead us nowhere]."
Polls were to close a 6 p.m. local time. Preliminary results were expected shortly afterward.
The final result won't be known for at least two weeks, however, since voting in the eastern city of Dresden has been delayed because of the death of a candidate. Although Dresden is a relatively small constituency, analysts say the outcome there could still be important if today's vote is very close.