Schroeder worries far right may scare off investors

Chancellor Gerhard Schroeder yesterday said the rising popularity of right-wing extremist parties was a "great problem" for Germany and could frighten off foreign investors.

In an interview with Berlin's Inforadio, Schroeder said he was alarmed by strong gains made by the far-right NPD in a regional election last Sunday and by the prospect of the party scoring even better results in two elections on Sunday.

"It's truly a great problem - and one that we don't need for inter-national political reasons," Schroeder said, according to an advance text of the interview.

"Germany is a free, democratic nation. And everything connecting us to the brown (Nazi) cesspool damages us, damages Germany, and damages our standing with international investors. I hope voters won't give right-wing extremists a chance." The National Democratic Party (NPD) came from nowhere to score a shock four per cent in the election last Sunday in the western state of Saarland. The far-right fringe has appealed to voters frustrated by cutbacks in unemployment benefits.

The NPD, which Schroeder's government tried unsuccessfully to outlaw, is projected to win five per cent to nine per cent in the eastern state of Saxony on Sunday, enough to win seats in the state assembly.

In another election on Sunday in the eastern state of Brandenburg, the rival far-right party DVU is expected to win six per cent. The DVU has held seats in Brandenburg since 1999.

Even though most of Germany's population of 82 million was born after 1945, the Nazi regime still haunts post-war Germans.

A number of small far-right parties - such as Republikaner, NPD and DVU - have in the past managed to clear five per cent hurdles needed for seats in state and local parliaments, but have often failed to win enough votes in subsequent elections to stay around.

But Schroeder's efforts to reform the economy by forcing those without a job to accept any kind of work have sparked angry protests, especially in the poorer eastern regions, that have help revitalise the far-right parties.

In the radio interview, Schroeder defended the reforms and said it was not the government's task to create jobs. He said mistakes in the east by his predecessor Helmut Kohl, especially misleading promises, were a cause for the disenchantment.