German left warns conservatives over coalition

BERLIN, Apr 29 (Reuters) Germany's Social Democrats (SPD), worried about the erosion of party support, warned their conservative coalition partners today to honour a pledge on tax policy or risk the collapse of the government.

It was the strongest warning from the SPD since a row over healthcare reform last year. The party, which is facing poor poll ratings, has to fight four regional elections next year that they look set to lose.

SPD chairman Kurt Beck told weekly newspaper Bild am Sonntag he was angered when some leading conservatives questioned a coalition agreement on changes to inheritance tax rules.

The SPD wants to increase the tax burden on larger inheritances to placate members of the party's left wing who are unhappy about plans to cut corporate taxes.

''I had to draw the line,'' the paper quoted Beck as saying.

''I expect that line to be respected in future. Anything else endangers the coalition.'' Peter Struck, the SPD's leader in parliament, said it would mean the end of the coalition if the conservatives let the inheritance tax initiative fail.

At a state election campaign event in Bremerhaven later today, Beck said he was not calling the existence of the coalition into question but said the conservatives should not be allowed to scupper important joint initiatives.

''I expect the coalition to work together for the legislative period (through autumn 2009),'' he said, adding there would be no problem if the conservatives honoured their pledge on inheritance tax reform.

TRADITIONAL VALUES Some 1-1/2 years after it joined Germany's first ''grand coalition'' of right and left since the 1960s, the SPD is floundering, lacking a strong leader and searching for ways to close a gap in opinion polls with the conservatives led by Chancellor Angela Merkel.

A recent survey of around 40,000 SPD members showed a clear desire to return the party to traditional values, with many opposing involvement by the armed forces in foreign missions and wanting a push for more social justice.

The survey, quoted in the Sueddeutsche Zeitung daily, was carried out as part of preparations for a new programme due to be voted in October.

A Forsa Institute poll published last week showed the SPD on 27 per cent, with the conservatives (CDU/CSU) on 34 per cent.

Fifty percent of the 2,500 Germans polled said they would choose Merkel in a direct vote for chancellor and only 20 per cent Beck.

Leading conservatives dismissed the latest SPD criticism.

''Coalitions don't collapse because of questions of policy but when members can no longer work with each other,'' conservative parliamentary leader Volker Kauder told the Bild daily. ''That's not currently the case,'' he added.

Analysts say the squabbling in the coalition is distracting policymakers from enacting urgent reforms to the economy.

REUTERS JS RAI2230