From what I understand there are some real hurdles ahead (that must be seen along with the upbeat news from the articles posted). To start, despite the DW article, this is not really a merger - more an electoral alliance of two sociologically very different parties (the PSD and the WASG). Their respective leaderships vaguely talk about a possible merger in 2 years if things go well. For now, the agreement is mostly about not running competing candidates, etc. - i.e. tactical and electoral, not strategic and programmatic. Together they can clear the 5% limit and get seats in Parliament.
The PSD stays burdened with being the remains of the East German CP. Its social base is perceived as those left behind in the past and even now the leadership has not been able to put forward ideas that appear "transformative". There are few signs this has changed. Also many, including their new electoral partners, have criticized the way the PSD have conducted themselves as coalition partners with the Social Democrats (SPD) in the ruling coalition of the Berlin City government and 3 Federal States (supporting cutbacks, etc) and feel this illustrates the direction the PSD would go if given the opportunity.
The WASG (The Labour and Social Election Alternative) was just formed in March as a west German amalgam from middle level union leaders from IG Metal (a basic industry union, politically a little bit akin to the UAW in its transition) and a very disparate group of social and "anti-globalist" activists, plus a few trotskyites. The WASG itself was also formed mostly as an electoral alliance (hence the name) rather than organically from a clear long term vision and unified social bases. Since March its energies have been focused on electoral politics and platforms rather than developing a new, unifying, long term vision.
The Left Party choose as its campaign leader Oscar Lafontaine, who years ago was a left leader in the SPD. He has visibly chosen not to join the new Party, just lend his name (perhaps analogous to Nader vis the Green Party). Lafontaine has not gotten off to a good start: he attacked "foreign workers", pointedly choosing to use the German phrase that was employed by the Nazis (he has said some similarly questionable things before this). This has allowed the SPD and others to paint the new Party as simply popularist demagogues. [IMO, Lafontaine's inability to put forward an image that is both politically responsible/sophisticated AND appeals to workers at a 'gut level' goes to the heart of the hurdles I see ahead. It is a problem of vision and of divided social base.]
I also note that several small but "smart money" groups (IMO), like the German section of ATTAC, have stayed out of the alliance, citing the lack so far of a clear and transformative program.
[BTW, The WASG is an interesting phenomena. Some belong to well established ideologies (religious groups, social identity groups, trotskyite groups, etc.) and are struggling to see how they can mathematically calculate a common denominator for electoral purposes - but without creating something new. Mostly this amounts to a split between those who want to maintain the "social welfare state" and those who want to speak of traditional socialism. I gather the WASG's economic platform was largely drafted by Axel Troost a post Keynesian economist and former Green Party Member of the European Parliament (so it falls squarely in the first category).
A few others in WASG (small numbers) seem to be searching to create new space by reclaiming political ground lost in 1920 by polarization of the left into Socialist or Communist Parties in the face of the Bolshevik Revolution. With the Soviet Union gone, they would like to re-examine the categories, divisions and policies created and maintained since 1920. I have seen this phenomena in other European countries (e.g. Italy).
For history buffs, in the German case this small group partly draws inspiration from the short lived group that rejected cooperation with WWI and split from the SPD to form the USPD. From 1914-1920 the USPD included Bernstein and Kautsky but also the Leibknecht brothers (Karl and Theodor) and even Rosa Luxemburg and the Spartakus League (who of course split off in 1918). In 1920 the USPD split over whether to join the Kominterm. Unable to find a united view of the Bolshevik Revolution, half the USPD left and joined the German Communist Party while the remaining half went back to the SPD. A tiny group remained under Karl Leibknect's brother Theodor. In its brief heyday the USPD was a fairly large party (20% of the vote?).
This small and unorganized group inside WASG sees an interest in recapturing this space within Marxism - a split away from Social Democracy - BUT not having to confront Leninism as a burning issue (I don't know they have been more specific than this, and they don't seem to be the types interested in Gramsci, or Mariategui, etc.) ]
Paul