By Annika Breidthardt
ABENSBERG, Germany (Reuters) - Angela Merkel's bid for a third term as chancellor could get a boost from her Bavarian allies who are set to extend their 56-year reign over the rich southern state in a vote on Sunday, just one week before Germany's federal election.
Bavarians, proud of their "laptop and lederhosen" economy which outperforms most of the country, are forecast to give the Christian Social Union (CSU) - the sister party of Merkel's Christian Democrats (CDU) - at least 47 percent of the vote.
That would signal a recovery from the Bavarian party's 2008 result of just over 43 percent - their worst state election in six decades - and encourage conservative voters across Germany as well as undermining the opposition Social Democrats (SPD).
"Bavaria could have an influence on the federal vote. If the CSU gets an absolute majority that will give momentum to the conservatives," said political scientist Frank Decker in Bonn.
Merkel, who has been chancellor since 2005, has ruled with a coalition made up of the CDU/CSU and the pro-business Free Democrats (FDP) since the last federal election in 2009.
Bavaria, home to 12.5 million of Germany's 80.5 million people, is the only state with a regional party - the CSU - in parliament. It is not possible to vote for Merkel's CDU on a ballot paper in the state but the CSU makes up nearly a quarter of her conservative bloc in parliament.
The CSU has run Bavaria since 1957.
"Our problem is that it's the tradition to vote for the CSU," complained Christian Ude, the SPD mayor of Munich who is running for state premier against the CSU's Horst Seehofer.
Coming close to the national election, Bavaria's vote could undermine the SPD just as their candidate for chancellor, Peer Steinbrueck, got a late boost to his campaign from strong performances on TV and in the Bundestag.
A rout for the center left in Munich would send a message that "the SPD's result won't be too strong on the federal level either", said Klaus-Peter Schoeppner, head of Emnid pollsters.
One risk for Merkel is a weak result for her junior coalition partner, the FDP, in Bavaria.
Pollsters say the FDP might struggle to clear the 5 percent hurdle for getting into the state assembly and the Bundestag. This would mean the end of the center-right coalition.
FDP failure to clear the hurdle in Bavaria could scare conservatives into voting FDP in the national election, which could weaken the CDU result.
Merkel and Steinbrueck have both campaigned in Bavaria, which exerts pressure on national policy when it comes to issues ranging from the euro to energy and the family.
If Bavaria were a country it would have the euro zone's sixth largest population and economy.
"I know no region in Europe that could compete with Bavaria," Seehofer, a burly 64-year-old, roared to a crowd of 3,000 in a beer tent at the annual Gillamoos festival last week.
Polls predict his party will fall short of historic heights of over 60 percent but is on track for a recovery from 2008, its worst result since 1954 at 43.4 percent.
Voters seem willing to shrug off headlines about nepotism in the state assembly that have tarnished the CSU's reputation.
"Bavarians are experienced when it comes to scandals and just don't view them as all that bad," said Manfred Guellner, head of the Forsa polling institute. "It's apparently acceptable as long as the state is doing well."
Ude, speaking to a smaller, quieter crowd a few meters away from Seehofer, said Bavarians knew the SPD had better policies "but have not yet come to the conclusion to vote for us".
"Why should we vote for anyone else?" asked Franz, a Seehofer supporter clad in lederhosen with a felt hat sprouting a tuft of animal hair. "We're doing well here in Bavaria."
The CSU is proud that it kept its independence from the other Christian-conservative parties when they joined together to form the CDU in the 1950s.
But Seehofer knows he must strike a balance between defending state interests and working on national issues with Merkel, who is almost as popular as him in Bavaria.
Seehofer calls her a "stroke of luck" for Germany but sometimes pushes his luck, for example when he proposed a toll for foreigners using the autobahn high-speed road network. He said it would be a key demand in federal coalition talks, prompting a rebuff from Merkel.
With polls showing seven out of 10 Bavarians support such a toll - which might violate European law - he knows the issue has traction in a car-loving state that is home to BMW and Audi.
"We are who we are and nobody can tell us what to do," Seehofer said.
(Editing by Stephen Brown and Anna Willard)