BERLIN: Chancellor Angela Merkel's embattled challenger unveiled his election manifesto Monday with an audacious pledge of full employment in a decade in the teeth of Germany's worst postwar recession.

Vice-chancellor Frank-Walter Steinmeier is carrying the Social Democrats' (SPD) banner into the September 27 election and was formally launching his campaign with a plan to create four million jobs by 2020.

With the economy shaping up to be the campaign's decisive issue, Steinmeier said his platform would turn the tide in favour of his party, which is trailing Merkel's conservatives by up to 15 points in the polls.

"We need to finally move beyond all this crisis talk and develop a clear outlook for the next decade," Steinmeier told reporters before he was due to deliver a keynote policy speech.

"Particularly amid this crisis, it is essential to say that we have the potential to create these four million jobs." Unemployment data released last week showed just under 3.5 million people were out of work in Europe's biggest economy, with economists saying the figure could hit 4.5 million by the middle of next year.

The 67-page "Plan for Germany" says energy-saving and "green" industries such as building electric cars could employ two million Germans and transform the country into the "Silicon Valley of ecological industrial production".

Steinmeier envisages another million new jobs in health and geriatric care as Germany's population ages, with the remaining million jobs in "creative" industries such as film and television, as well as services and trade.

The candidate, who is also Germany's foreign minister, has struggled to score points against the popular Merkel, who has honed an image as an effective if cautious crisis-manager.

She aims to dump the SPD as junior partner to her conservative Christian Union bloc (CDU/CSU) and link up with the smaller pro-business Free Democrats (FDP) in a centre-right coalition after the election.

The influential Der Spiegel newsweekly, which obtained an advance copy of Steinmeier's manifesto, said the SPD had abandoned its hopes for victory, seeing its best chance in a return to the left-right grand coalition.

"The SPD's strategy is now being reduced to the singular aim of preventing a CDU/CSU-FDP government," it said. "Steinmeier and (SPD chief Franz) Muentefering want to salvage government participation in a grand coalition, and they both know that if this fails, their days at the top of the party will be numbered." Conservative Economy Minister Karl-Theodor zu Guttenberg accused Steinmeier of making pie-in-the-sky promises with no plan for how they would be financed.

"People are sick of being bombarded with pledges during election campaigns," Guttenberg said. "They are right to expect specific proposals. There are very few of those in the SPD plan." Several newspapers said Steinmeier had sacrificed credibility with his four-million-jobs pledge.

"Steinmeier is not making it hard for his opponents. Of course they'll have to ask him why the SPD hasn't performed the labour miracle during its last 11 years in government," the daily Hamburger Abendblatt wrote.

The centre-left Sueddeutsche Zeitung said the manifesto was "imaginative, has substance and a good foundation" but that the four-million figure was "wishful thinking".

Political scientist Peter Loesche told the daily Der Tagesspiegel that the platform was a "desperate attempt by the Social Democrats to gain ground in economic policy because the CDU has much higher ratings in that area -- a real problem for the SPD because that issue will decide the election." dlc/ric/co Germany-politics-vote AFP 031204 GMT AUG 09.