Echoes of Nazi politics emerge as Teflon Chancellor faces his Westfailure

GERHARD Schröder is known as the Teflon Chancellor of Germany. Six-and-a-half years into office he remains defiant, despite unfulfilled pledges that have made Germany the new sick man of Europe.

But political life has become much stickier of late. In a week’s time the state of North Rhine-Westphalia goes to the polls against the backdrop of his unsuccessful tenure, massive unemployment, a stagnant economy, savage welfare reforms, a tax black hole and a catastrophic drop in foreign investment.

It is the most populous state in Germany, with 17 million inhabitants, and home for one million unemployed out of five million jobless nationwide. For 40 years it has been ruled by Schrder’s Social Democrats, either alone or in coalition, the workers of steel, coal and gas lured to vote for them by generous subsidies.

Now that Germany Inc is bust, the voters of North Rhine-Westphalia are about to switch sides. Major opinion polls project an 11% lead for the rival conservative CDU party, which will likely end up running the state in coalition with the liberal FDP party.

What happens in the polling booths of NRW next Sunday could well write the political obituary for Tony Blair’s greatest ally in Europe. He knows rejection will probably morph into the blueprint for what will happen to him and his party in Germany’s general election in autumn 2006.

Schrder only succeeded in winning the 2002 vote on the back of his response to war in Iraq and devastating floods in eastern Germany. But there are no more political saviours on the horizon, so it was left to a loyal Schrder lieutenant to conjure up a crisis of sorts.

SPD party secretary Franz Muenterfering unleashed a stream of rhetoric linking Germany’s economic woes to "locust" investors. While this might have short term appeal to blue-collar workers in uncertain times, Muenterfering’s comments were crude at best and laden with Nazi-era anti-Semitic tones at worst.

It has emerged that a secret blacklist circulated among Cabinet members contains the names of companies described as a "plague of locusts" feeding on German society.

UK-based Permeira has invested hundreds of millions of pounds in Germany, and is on the list drawn up to identify wayward capitalists denounced by Muenterfering, the chancellor’s official authority on social democrat ideology.

"Some financial investors spare no thought for the people whose jobs they destroy," he told Bild, the country’s biggest tabloid newspaper.

"They remain anonymous, have no face, fall like a plague of locusts over our companies, devour everything, then fly on to the next one."

The 12 investment firms featured on the list, described as the "dirty dozen" by local media, also include firms with a Jewish heritage, such as Goldman Sachs and Haim Saban, an Israeli billionaire who owns the rights to The Muppets.

Coinciding with a string of commemorations marking the liberation of Nazi concentration camps in May 1945, intellectuals have responded by comparing the government’s rhetoric with the tactics of Joseph Gbbels, the Nazi propagandist who portrayed Jews as parasitic vermin.

"Today they are describing the plague as a swarm of locusts, where once they were described as a plague of rats or Jewish pigs," said Michael Wolffsohn, a German historian.

Spurred on by the government, the country’s most powerful trade union, IG Metall, distributed posters on Wednesday of a grinning locust wearing a pin-striped suit, a top-hat coloured with the stars and stripes, and with the addition of a long nose, simply captioned: "Bloodsuckers".

This is something, say critics, straight from the anti-Jewish rag ‘Der Stuermer’ of the 1930s whose editor, Julius Streicher, was hanged at Nuremberg.

The crudity of the SPD assault shows up the desperation of Schrder.

Germany’s long term outlook for 2005 is working against him in North Rhine-Westphalia.

Some 40,000 small companies went bust last year and unemployment runs at 15.4%, while nationwide the rate is running at 10.5%.