While Olazabal celebrated his score on Day 2, it was Harrington who did so in the third round, and he moved to 22-under for the tournament in the process.
The Irishman, who turned 30 just a day ago, opened his round in the grandest of fashions, and was 7-under through his first eight holes, with five birdies and an eagle.
A sting of pars mid-round calmed his torrid pace slightly, but he ended in more good form, rattling home three late birdies over his final four holes.
As a result, Harrington leads by a stroke over Daly, who went around the Golfclub Munchen Nord-Eichenried in 68, and he is three ahead of defending champion Thomas Bjorn (65).
Meanwhile, Thomas Levet appears to be the best contender to make a push into the Ryder Cup.
At 20th on the European team points list, Levet must win this week to make the automatically-qualifying top-10.
While it may be a long shot, he gave ample help to his cause, as the Frenchman shot 64 on Saturday to reach the 16-under mark and a tie for fourth with Raymond Russell (66).
However, at six shots off Harringtons pace, it will certainly require a bit of magic on Sunday.
Levet feels it could be possible though.
My only goal when I came here was the No. 1 spot in the tournament, and if it happens, it happens, he said. Its possible and now that I am in the hunt, maybe I can do it tomorrow.
Others who will be trying to work miracles on Day 4 will be Olazabal, who followed up his fabulous Saturday score with a slightly disappointing 70.
At 14-under, both he and Scotlands Dean Robertson are eight shots back and seemingly out of the picture for victory.
Even worse is Sergio Garcia.
Garcia sits at 13-under entering the last day, but may take refuge in the fact that captain Sam Torrance has already made public his intentions to select the young Spaniard to the team regardless of how he finishes this week.
In reality, only American Daly is in true position to challenge Harrington.
The long bombers round on Saturday was just fine, with an eagle and two birdies, but not good enough to hold off the Irishmans out-of-this-world 62.
For the week, however, the 95 Open champion has only made two bogies through 54 holes.
Certainly good, but not great ' Harrington has carded just one.
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