German leftists move towards forming new party

Forty German trade unionists and leftist members of Chancellor Gerhard Schroeder's Social Democrats, disenchanted with his economic reforms, took the first step yesterday towards forming a new far-left party.

United by fierce opposition to Mr Schroeder's "Agenda 2010" pro-business reform measures, they launched the "Electoral Alternative for Labour and Social Justice", and said they would soon decide their next move.

The leftists, who could siphon off crucial support from Mr Schroeder in 2005 regional elections if they formed a breakaway party, want higher taxes on the rich, a wealth tax and new inheritance tax rules, plus a halt to the reforms causing pain to low earners.

The union officials and left-wingers told a news conference they hoped to set up chapters in all 16 states in the next few months and then hold a federal congress that would decide whether to form a party.

"We want to raise the pressure on (SPD) political leaders to change course," said Klaus Ernst, a regional IG Metall union official already expelled by the SPD. The officials would not say when a new party might first appear on an election ballot.

IG Metall leaders, who also want Mr Schroeder to change course, have kept their distance from the far-left rebels. SPD chairman Franz Muentefering criticised the leftists for making promises they could not keep and said they risked expulsion from the party.

Mr Schroeder's SPD has been routed in more than half a dozen state and local polls since he narrowly won re-election in 2002. Business leaders applaud his efforts to revitalise the economy but the left has urged him to change course as voters desert the party.

"Voters want an electable alternative," said Thomas Haendel, another IG Metall union official. He dismissed charges they were playing into the hands of the conservative opposition, saying their aim was to win back millions of voters now abstaining.

Leaders of the breakaway group said 70 regional groups supported their aims and some 10,000 people had signed petitions endorsing the movement.

Mr Schroeder rejected leftist charges he had turned his back on the poor and that the SPD no longer stood for social justice.

"That's just false," Mr Schroeder said in an interview with Der Spiegel when asked about claims his reforms are unfair to the poor. He said taxes for those on low incomes had been cut by 11 percentage points to 15 per cent since he took office in 1998, student loans raised, child support boosted and more all-day schools set up.