World financial crisis is spawning new dangers for German Chancellor Angela Merkel's conservatives and improving the prospects of a rising far-left party ahead of national elections next year.
Only a few months ago, Ms Merkel's Christian Democrats (CDU) and their Social Democrat (SPD) coalition partners could point to a robust German economy as one of their major achievements.
Despite a surge in the euro and spike in oil prices, the finances of German firms remained robust, growth strong and unemployment on a steady three-year decline.
But the turmoil of the past weeks on world financial markets has increased the odds that the German economy will fall into recession this year and slow significantly as it heads into next year, with consequences for Germany's ruling parties in the next federal vote. "This crisis will only strengthen the anti-capitalist, anti-globalisation voices in Germany," said Gerd Langguth, a political scientist at Bonn University.
"The Left party is the obvious beneficiary."
Led by former SPD leader Oskar Lafontaine, the Left has seen its support surge to 15 per cent in recent polls. Backing for the SPD, Germany's oldest party, has dipped steeply.
The Left party advocates a sharp rise in the minimum wage, a ban on layoffs at profitable firms and an end to stock options and to hedge funds which they say offer great wealth to the few while endangering the jobs of many.
These ideas sounded far-flung when Mr Lafontaine unveiled them at a party congress in the east German city of Cottbus in May, but now some of them look prescient - a shift in the general debate that the Left will be keen to exploit.
Even before the unprecedented events which saw US investment bank Lehman Brothers declare bankruptcy protection, stock markets slide and Washington announce a €476 billion financial sector rescue package, concerns were mounting in Ms Merkel's chancellery about the political risks of an economic slowdown.
In late summer, a senior adviser to Ms Merkel expressed concern to Reuters that a weakening of growth would play into the hands of fringe parties, like the Left party, at the expense of her conservatives and the centre-left SPD.
These risks have only increased after the developments of the past weeks.
Leading economists have revised down their expectations for Europe's largest economy, with the most pessimistic now predicting little to no growth next year.
Juergen Michels, an economist at Citigroup in London, said the major risk for Germany's ruling parties would be a reversal in a downward unemployment trend that pushed the jobless rate to a 16-year low of 7.6 per cent last month.