Eurosceptics poised for German breakthrough, hurting Merkel

BERLIN - A new Eurosceptical party is on the brink of entering the German parliament for the first time, an opinion poll showed, casting doubt on Chancellor Angela Merkel's bid to maintain her centre-right coalition and complicating her euro zone policy.

Merkel still looks set to secure a third term in Sunday's general election. But the Alternative for Germany (AfD), which has risen on a tide of public hostility to bailouts of indebted southern euro zone countries, could further fragment the lower house, forcing her into a right-left "grand coalition".

A breakthrough for the party, which advocates forcing weaker members out of the single currency area, would send shock waves around Europe and could spook financial markets, even though its voice in parliament would be small.

An INSA poll on Thursday gave Merkel's conservatives 38 per cent and their liberal Free Democrat (FDP) allies 6 per cent, putting the centre-right one point behind the three left-of-centre opposition parties, with a combined 45 per cent.

The survey was the first to show the AfD, created just seven months ago, clearing the 5 per cent hurdle to win seats in the Bundestag lower house. Its best score in other polls has been 4 per cent, but pollsters say it may have higher unavowed support.

If the AfD becomes the first new party to enter the Bundestag since 1990, Merkel would probably have to negotiate a coalition with the pro-European opposition Social Democrats (SPD), with whom she governed in 2005-2009.

The INSA poll was also the first to be taken after Bavarian conservatives won a regional election last Sunday - but it showed no bounce for Merkel in the national race.

The ruling Christian Democrats (CDU) had tried to ignore the AfD, but abruptly changed tack this week and deployed respected Finance Minister Wolfgang Schaeuble to attack the skeptics, who want Greece and other bailout recipients out of the euro.

The 71-year-old minister, a veteran supporter of European integration, said the AfD's anti-euro argument "has no credibility and is extremely dangerous for our prosperity".

"GRUMPY OLD MEN"

Led by university professors and supported, in the words of one pollster, by "grumpy old men", the AfD is mopping up right-wing protest votes and some of the millions who could not be bothered to cast ballots in 2009.

"The interesting thing is that 41 per cent of AfD voters either voted for the 'other parties' category or not at all in 2009," INSA chief Hermann Binkert told Reuters.

Most other AfD supporters said they had voted centre-right last time but nine per cent came from the hard Left, also critical of the euro, and a handful from the SPD and Greens.

Merkel and the AfD have ruled out working with each other in the Bundestag, but one CDU leader - Volker Bouffier, who defends his premiership of Hesse in a state vote on Sunday - said he might consider it, before retracting after a storm of criticism.

The AfD, which has mobilized support on social media sites like Facebook and YouTube and crowd-sourced some donations - raising 430,000 euros ($574,000) online in just 48 hours last weekend - says it stands for the interests of ordinary Germans.

In TV campaign spots it argues that taxpayers' money should be spent on schools, families and pensions rather than helping Greece pay off its debts. It took out a full-page press ad on Thursday saying: "The country needs new leaders!"

If the AfD enters parliament, it might paradoxically help peripheral euro zone states by making a 'grand coalition' with the SPD - which wants faster EU integration and more stimulus for economic growth - almost inevitable.

The SPD and Greens have voted for all of Merkel's euro zone emergency measures in parliament whereas some dissidents in her centre-right coalition have opposed bailouts.

However, a Bundestag platform would give the AfD access to state funding and help it spread Euroscepticism in an electorate exasperated by bailouts ahead of European Parliament elections next year in which protest parties tend to perform well.

Simon Tilford, chief economist at the Centre for European Reform, said the likelihood of further bailouts "will play into the hands of those in Germany who see the euro as a mistake".

"There is a chance that over time anti-euro feeling could increase and it could now find political representation."

Goldman Sachs economist Dirk Schumacher said the prospect of losing more disenchanted voters might mean that "the better the result for the AfD, the more reluctant the centre-right parties are likely to be to support further European integration".

However one political scientist played down the potential impact of the AfD entering parliament.

"If they get in, of which I am sceptical, they will only have a few lawmakers which will not be enough to unsettle Merkel," said Oskar Niedermayer of Berlin's Free University.

"The only danger they pose is to her preferred coalition with the FDP, which could lack the necessary votes to continue governing."