25 May 2005

BERLIN - Supporters of Chancellor Gerhard Schroeder expressed alarm on Wednesday as Germany's left began to splinter, reducing the government's apparently slim chances of being returned to power in early national elections expected this September.

Oskar Lafontaine, a former chairman of Schroeder's Social Democrats (SPD), dropped a political bombshell on Tuesday by announcing he had quit the party to protest jobless benefit cuts and would help set up a new leftist election bloc.

Lafontaine is seeking an alliance with former East German communists the PDS and the Work and Social Justice Election Alternative (WASG), which won 2.2 percent in North Rhine-Westphalia state elections last Sunday.

Schroeder announced early general elections after his SPD was trounced in North Rhine-Westphalia by the opposition conservative Christian Democrats (CDU).

"Oskar's revenge - is he going to crucify Schroeder?" was the banner headline in Germany's biggest selling daily, the Bild tabloid.

Lafontaine and Schroeder have long been bitter rivals. Lafontaine abruptly quit the chancellor's first cabinet in 1999 after less than five months in office - apparently because he couldn't stand being number two. Since then the man dubbed the 'Saarland Napoleon' due to his stature and ambition has moved steadily to the left.

A popular and eloquent figure on the German left, Lafontaine could steal leftist votes crucially needed by Schroeder. The chancellor has already largely lost another key bloc, the centrist vote or 'neue Mitte', which first helped bring him to power in 1998.

Former SPD leader Hans-Jochen Vogel attacked Lafontaine in a Deutschlandfunk radio interview.

"All his activities will only help the conservatives," warned Vogel, adding that in a tight election even taking away 1 to 1.5 percent of Schroeder's vote could be decisive.

Michael Somer, chief of the German Federation of Trade Unions (DGB), also criticised Lafontaine's move.

"We certainly share some of Lafontaine's positions but the point is that if he splits the left it certainly won't get stronger," said Somer.

Lafontaine, in a Bild newspaper interview, called for raising taxes on the wealthy and on business, expanding Germany's social welfare programmes and reversing cuts to unemployment benefits passed under Schroeder.

Given that Schroeder is battling 12 percent unemployment with 4.9 million people jobless, the position taken by Lafontaine could scoop up a significant share of votes.

Opinion polls make for grim reading in the Schroeder camp.

Voter surveys this week show Schroeder's SPD-Greens alliance as low as 28 percent, with the opposition CDU/CSU and its Free Democratic (FDP) ally at up to 54 percent.

Meanwhile, the confident conservative opposition is setting out its election platform and speculation is rife over who will get key cabinet positions if the likely CDU/CSU candidate, Angela Merkel, wins to become Germany's first woman leader.

Among major changes planned if the opposition wins is reversing a ban by Schroeder's government on nuclear power and allowing the country's 17 remaining nuclear power stations to stay open.

An annual EUR 2.5 billion subsidy for wind energy, under which thousands of giant windmills have been built, will likely be abolished in order to cut energy taxes, media reports said.

Germany's notorious 'Ladenschlussgesetz' or store-closing law, which mandates that all stores close by 8pm and remain shut on Sundays, would be radically loosened up or abolished if the conservatives win.

Reducing unemployment will be crucial and here the CDU/CSU-FDP are discussing a series of measures including a 10 percent cut in wages for companies which give jobs to long-term unemployed; allowing more limited term employment; loosening Germany's strict sacking laws; and reducing the legal right of employees to demand part time work.

In addition, the conservatives want to eliminate red tape and state-mandated paperwork for businesses with up to 20 employees.

Media reports suggest that if Merkel wins the election - expected to be held on 18 September - she will name Bavarian prime minister Edmund Stoiber as a super-minister for economics and finance.

Foreign minister would likely be the FDP's parliamentary leader Wolfgang Gerhardt, with the defence ministry going to Michael Glos, who heads the CSU in Berlin's parliament.

The key interior ministry portfolio will probably be given to the law and order Bavarian interior minister Guenther Beckstein, reports said.

DPA

Subject: German news