By Sarah Marsh
KARLSRUHE, Germany (Reuters) - Poll figures may be low and forecasts gloomy, but Martina Reuter felt certain things were looking up for her party - Germany's Free Democrats (FDP), the junior partner in Chancellor Angela Merkel's centre-right coalition.
"At the moment there is a real mood of change ... There is a return to the old, fundamental values," the 50-year-old party member told Reuters at a weekend FDP congress in Karlsruhe, western Germany.
Her comments were in tune with the atmosphere of determined bonhomie among the hundreds of delegates at the gathering.
But they clashed with the latest data - an opinion poll published on Sunday confirmed other forecasts that the FDP would fail to reach the 5 percent threshold needed to enter parliament if a national election scheduled for 2013 were held today.
It is far from certain the pro-business party, which has spent 44 of the last 64 years in government, will muster enough votes to stay in two regional assemblies in May elections.
The FDP's woes are also a headache for Merkel because they could distract her coalition from its main task of tackling the euro zone crisis. Merkel will also need a new coalition partner if the FDP is ejected from the Bundestag lower house next year.
At the conference, the party's mostly young leaders circulated, cracking jokes, slapping backs and greeting supporters by their first names and using the familiar pronoun 'du'.
"It's certainly not an easy situation right now, but we've had periods before when we've fallen out of nearly all state parliaments," said party member Thomas Seidenberg, 51.
Leaders took their turns at the podium calling for a return to the FDP's core liberal values and launching blistering attacks on other parties.
The party also voted to endorse a 'freedom theses' program outlining its philosophy.
But the displays of optimism did not impress all.
"Given our polling figures, it would have been good to look at specific policies," said Christian Mandery, 24, a computer sciences student. "We didn't need a new program, which by nature is abstract. The voters want specific answers."
LOOKING FOR ANSWERS
Anyone looking for a clear set of those specific policies may have been disappointed by the conference speeches.
FDP leader Philipp Roesler, 39, told the conference its focus should be on economic growth as he urged a party often accused in Germany of only caring about the rich to remain true to its liberal values and heritage.
Analysts have said he may be ousted from a post he has held for less than a year if the party fares badly in the upcoming polls in Schleswig-Holstein and in North Rhine-Westphalia (NRW), Germany's most populous state, in May.
Christian Lindner, the man carrying the FDP banner into the NRW contest on May 13, said the priority should be budget consolidation, while his colleague from Schleswig-Holstein, Wolfgang Kubicki, called for a tax hike for top earners - an odd cause for a party that champions free enterprise and low taxes.
On Europe, the mood was skeptical for a party that championed European integration in the 1980s and 1990s under long-serving FDP foreign minister Hans-Dietrich Genscher.
Delegates heard calls for restricting the lifespan of the EU's bailout fund that is meant to be permanent, saying it would no longer be necessary when all states had reduced their debt levels to 60 percent of gross domestic product.
The FDP's parliamentary floor leader Rainer Bruederle called for greater voting rights for Germany, the euro zone's largest economy, within the European Central Bank.
CRUCIAL TEST LOOMS
Political analysts said the FDP's performance in the May regional elections, especially in NRW, would be a crucial test of whether it can survive on the national stage.
"If (NRW FDP leader) Christian Lindner manages to get the party over the 5 percent hurdle, it can have a big psychological impact on a federal level," said Gerd Langguth, political scientist at University of Bonn. "But if not, then their prospects will be glum."
"If they fail to get into the Bundestag, it would be a tectonic shift in the German party system."
The FDP's remorseless decline since 2009 has made it the butt of jokes. One popular song called "Ich habe nie FDP gewaehlt" (I never voted FDP) is the ironic chronicle of a man who says he made many mistakes in his life but at least he never voted FDP.
The poll published in Sunday's Bild am Sonntag paper showed the FDP on four percent - up from the two or three percent ratings it has seen over the past year but still well below the 14.6 percent it won in the 2009 election.
Germany's king-maker since World War Two, the FDP has been a partner in more post-war governments than any other party, shoring up either the centre-right Christian Democrats now led by Merkel or the centre-left Social Democrats in power.
At their congress FDP leaders accused Merkel's conservatives of sliding inexorably towards the left and of fearing freedom. Roesler said only the FDP now represented Germany's aspiring middle classes.
FDP leaders also blasted the Greens as "intolerant zealots" prescribing a "lifestyle dictatorship " and compared the maverick new Pirate Party - which has drawn votes from all other parties - to dangerous Somali pirates that German and other Western navies are trying to combat off the African coast.
(Reporting By Sarah Marsh, writing by Sarah Marsh and Gareth Jones, editing by Andrew Heavens)