German Industrialist Hopping Mad at 'locust' Accusation

One of Germany's leading industrialists yesterday accused the chairman of the ruling Social Democrat party of "stupidity", in an acrimonious row between the country's centre-left government and big business.

The row erupted two weeks ago when Franz Müntefering, the Social Democrats' chairman, compared companies that laid off German workers, despite making big profits, to a "swarm of locusts".

Mr Müntefering stepped up his attack on capitalism at the weekend by releasing a "locust list" of 12 leading German industrialists who, he said, were destroying German society. The list included household names from companies such as Goldman Sachs and Deutsche Bank, together with private equity firms and a German investment fund.

One of the 12 named by Mr Müntefering was Roland Flach, head of the German firm WCM, who hit back yesterday.

Mr Flach said the party chairman, a close ally of Germany's chancellor, Gerhard Schröder, was talking nonsense. "This is crass stupidity. It damages our country," he told the Guardian. "He says we are chopping up and destroying German firms. In fact, we haven't destroyed a single job."

A spokesman for the BDA, the employers' association, added: "The whole debate bypasses reality."

Mr Flach said that Mr Müntefering's attack on capitalism, was an attempt to win back disillusioned Social Democrat voters ahead of an election in less than three weeks' time in North Rhine-Westphalia. "It's the only reason he's doing it," he said.

The exchanges between corporate Germany and the country's struggling coalition government come at a time of deep economic gloom. Just under 5 million Germans are on the dole. Those who do have jobs are increasingly anxious about losing them, especially to workers from eastern Europe who are prepared to work for lower wages.

Mr Müntefering's attack may have struck a chord with some voters, but does not appear to be enough to save his party from defeat in the North Rhine-Westphalia election. A poll in Der Spiegel magazine suggests that the opposition conservatives are likely to win in Germany's most populous state - dealing a huge blow to Mr Schröder in the run-up to the general election next year. The onslaught has also provoked unease among the Social Democrats' junior coalition partner, the Greens.

"Firms have to be allowed to make profits, otherwise there are no jobs," Katrin Göring-Eckardt, a leading Green, said yesterday in a newspaper interview.

Mr Müntefering had already singled out Josef Ackermann, the head of Deutsche Bank, for criticism, after the company announced that it was sacking 1,920 workers despite making record profits.

"By taking these steps we are investing in the long-term success of the bank," Mr Ackermann claimed.

Yesterday a spokeswoman for the Social Democrats said that Mr Müntefering's aides had put together the "locust list" by combing through the press.

Asked whether it was a good idea, she replied: "I can't comment on that."