Lafontaine's Left shakes up German politics

By Noah Barkin

COTTBUS, Germany (Reuters) - Few politicians in Germany have quite as much momentum these days as Oskar Lafontaine and the populist leader of the rising Left party is making the most of it.

At a weekend congress in the eastern city of Cottbus, Lafontaine whipped up Left party delegates with attacks on market capitalism and basked in the glow of media reports that have dubbed him Germany's "secret chancellor".

"We are being hailed as the most successful new party in decades and they say we are setting the political agenda in Germany," a beaming Lafontaine told some 600 "Linke" supporters gathered for the party's first national convention.

The Left and Lafontaine, a 64-year-old former chairman of the Social Democrats (SPD) who had a short, turbulent stint as German finance minister in the late 1990s, are on a roll.

Formed last year when a group of Lafontaine-led SPD defectors based in western Germany merged with the ex-communist Party of Democratic Socialism (PDS), the new party has thrown German politics into disarray and its big parties, particularly the centre-left SPD, on the defensive.

The Left has profited from the bickering and policy gridlock that has characterized Chancellor Angela Merkel's "grand coalition", and attracted thousands of Germans who feel the economic recovery of the past two years has passed them by.

Earlier this year, they entered the parliaments of three western states within the span of a month, proving their appeal goes beyond the have-nots in Germany's former communist east.

Now they are being credited with sparking the SPD and Merkel's left-right coalition into action on issues ranging from the minimum wage to unemployment benefits and lawmaker salaries.

"Lafontaine is the one shaping the debate on social issues in Germany right now," said Wolfgang Nowak, head of the Alfred Herrhausen Society, a Deutsche Bank think tank. "He is effectively defining policy for the SPD."

EAST-WEST DIVIDE

With support of 12 to 15 percent in national polls, the Left has emerged as Germany's third largest party, behind Merkel's Christian Democrats (CDU) and the struggling SPD. The next federal election will be in 2009.

Throw in the Greens and the liberal Free Democrats (FDP) and Germany now has five sizeable parties -- a fractured political landscape that has complicated coalition building at both the state and federal levels. Against this backdrop, Lafontaine and his party have emerged as influential power brokers.

But with the success has come increased scrutiny of the party, its leaders and their politics.

In the west, the Left has struggled to come up with qualified members to represent it in state parliaments -- a problem highlighted in February when it was forced to dismiss a regional deputy who voiced support for a return of the Stasi, East Germany's feared secret police.

In the run-up to the Cottbus convention, the Left had to force another of its members, Sahra Wagenknecht, to drop her candidacy for deputy party leader because of her role in the Communist Platform, an organization that advocates the overthrow of capitalism and is monitored by German intelligence.