Voters in Germany's biggest state, North Rhine-Westphalia, are choosing a regional parliament testing the popularity of chancellor Angela Merkel's Christian Democrats (CDU).
Analysts say voters look set to reject Mrs Merkel's tough line on fiscal discipline as a cure for state debt.
Recent polls in Greece, France and Italy have rejected austerity policies.
The CDU and its national coalition partner, the Free Democrats, recently lost elections in the northern state of Schleswig-Holstein. The CDU scored its lowest tally in the state for 50 years.
The BBC reports the poll in North Rhine-Westphalia (NRW) will test the popularity of Chancellor Merkel's CDU, as opposition to her strict austerity policies grows outside Germany.
NRW, Germany's most populous state and with a large economy, has a history of influencing national politics.
The election was called in March after the state's minority government, run by a coalition of the SPD and Greens - narrowly failed to get a budget passed.
Despite its troubles, polls suggest that state premier and SPD candidate Hannelore Kraft - who has headed the fragile government for the past two years - will easily defeat CDU rival Norbert Roettgen, who is Mrs Merkel's environment minister.
In her campaign, Ms Kraft has emphasised strengthening indebted local communities, investing in education and boosting the state's business appeal.
Nationally, Sunday's election will not change the balance of power, whatever the outcome.
But opposition leaders warned it could send an important signal ahead of national elections expected in late 2013.
