By Dave Graham
BERLIN (Reuters) - Could an aristocratic young rock fan tip the balance of Germany's federal election?
Just 37 years old and less than four months in the post of economy minister, Karl-Theodor zu Guttenberg has emerged as the most high-profile and eloquent defender of free markets in Chancellor Angela Merkel's conservative bloc.
His opposition to state bailouts in the economic crisis has thrown divisions between Merkel's conservatives and the rival Social Democrats (SPD) into stark relief -- and staked out the ground on which the campaign is increasingly being fought.
His hands-off approach to Germany's corporate woes could provide the left with a target or mobilise support in the September vote among economic liberals who feel Merkel's policies have too often borne the stamp of the SPD -- her awkward partners in Berlin's "grand coalition."
"It could be decisive," said Norbert Walter, chief economist of Deutsche Bank. "The question is how much bad news is still to come, and how many aid requests can be put off for now. Guttenberg faces a very delicate dance along the razor's edge."
Rising from obscurity to become one of the most recognisable faces of the economic crisis, Freiherr (Baron) von und zu Guttenberg is at the centre of SPD efforts to depict the conservatives as out of touch with workers.
Dubbed the "Baron from Bavaria" by ex-SPD Chancellor Gerhard Schroeder, the clean-cut Guttenberg has wasted no chance to command centre stage in government efforts to resolve the fate of struggling firms like carmaker Opel and retailer Arcandor.
The nickname has drawn comparisons to the treatment of Paul Kirchhof, the constitutional law scholar and flat-tax advocate Merkel surprisingly put forward as her candidate for finance minister ahead of the last vote in 2005.
Mocking Kirchhof as the "Professor from Heidelberg," Schroeder tapped into public fears that the conservatives were aloof and too eager to please the rich, a tactic which helped slash Merkel's commanding poll lead as election day neared.
In the end, she only narrowly beat the SPD, a result which forced her into a "grand coalition" with her centre-left rivals.
"It worked with Kirchhof," said Uwe Andersen, a political scientist at the University of Bochum. "But I don't think it's going to work this time with Guttenberg."
SLICKED BACK HAIR
Sporting steel-rimmed glasses with his hair permanently slicked back, the omnipresent Guttenberg has mastered the sound bite and become one of Germany's most popular politicians since he was appointed in February, according to surveys.
"There has probably never been a politician in Germany who has risen to such high office and become so popular in such a short period," the Sueddeutsche Zeitung daily wrote this month.
Germany's youngest economy minister has had unusual room to raise his profile as the country battles a recession that the government expects to make the economy shrink nearly seven times faster in 2009 than in any year since World War Two.
Peter Loesche, political scientist at the University of Goettingen, said: "He's self-confident, he's professional, and the media has really helped, because they've thirsted for a character with a bit of colour in a cabinet awash with grey tones. But of course therein lies the danger of a sudden fall."
A Google News search in German on Monday retrieved more than twice as many hits for Guttenberg as that of SPD Finance Minister Peer Steinbrueck, the dominant figure in the German crisis response prior to his younger rival's appointment.
A member of the Christian Social Union (CSU), the Bavarian sister party to Merkel's Christian Democrats (CDU), Guttenberg has shown an ability to turn defeat to his advantage.
Last month he resisted a push by fellow cabinet members to give carmaker Opel billions in state aid as part of a hastily arranged deal with Canadian auto parts group Magna and was even rumoured to have offered to step down when they overruled him.
Since then, large swathes of the commentariat have hailed Guttenberg -- photographed last month grinning in a baseball cap at a concert by rockers AC/DC -- as the lone defender in Merkel's government of Germany's post-war free market model.
Merkel's conservatives are polling 10 points ahead of the SPD in opinion surveys, though their prospects of obtaining a majority with their preferred coalition partners, the market-liberal Free Democrats (FDP), are finely balanced.
Guttenberg, married to a great-great granddaughter of former German chancellor Otto von Bismarck, is expected to help Merkel reach out to younger voters.
For now, analysts say the strategy being pursued by Guttenberg is focussed on luring back voters from the FDP, the big winners in Sunday's European Parliament vote.
Merkel is hoping to form a coalition with the FDP in September, and many believe Guttenberg's rise could continue into the Finance Ministry if the vote goes her way.
(Writing by Dave Graham; Editing by Noah Barkin)
