The recent ruling by Germany's constitutional court, which approved a request to defund the neo-Nazi Homeland party, may set a precedent for the future of the country's far-right Alternative for Germany (AfD) party, which remains the second most popular party ahead of upcoming elections.
The verdict comes as Germany debates how to counter the rising popularity of the AfD, which is under close surveillance by domestic intelligence after being classed a "suspected case of far-right extremism."
Homeland, known until 2023 as the NPD, was "excluded from state funding for a period of six years," the court said.
In its reasoning, the court said Homeland sought to "eliminate the free democratic order" and had a "racist, in particular anti-Muslim, anti-Semitic and anti-Gypsy, attitude" that clashed with Germany's constitutional principles.
The neo-Nazi group would therefore lose access to state funding available to parties, as well as any tax breaks.
The ruling was a "confirmation of the pathway to not offering much space to the enemies of freedom," Chancellor Olaf Scholz told journalists.
"The forces that want to dismantle and destroy our democracy must not receive a cent of government funding," Interior Minister Nancy Faeser said.
The AfD currently sits second in national polls and is leading them in several eastern regions where elections are set to be held later this year.
'Confirmed' extremist
Markus Soeder, the conservative premier of the southern region of Bavaria, said ahead of the ruling that withdrawing funds from Homeland could be a "blueprint" for dealing with the growing threat from AfD.
Three of the party's regional branches – in the eastern states of Saxony, Saxony-Anhalt and Thuringia – are classed as "confirmed" extremist organizations for their efforts to undermine democracy and their anti-immigrant rhetoric.
Over the weekend, hundreds of thousands of people came out to protest against the AfD after its members were revealed to have discussed a mass deportation plan at a meeting with extremists.
The mooted mass deportation plan was "an attack on the foundations of our society", Faeser said.
"Right-wing extremism is the greatest extremist threat to our democracy -- and to people in our country," added Faeser.
Withdrawing public funding was "another instrument" to defend democracy, Faeser told journalists at a news conference, while refusing to rule out a similar move against the AfD.
Some government figures have urged caution, however, and warned against giving the AfD material for an anti-establishment campaign.
Failed ban
The challenge to the AfD needed to be "political," while any action should be limited to the "constitutionally necessary and possible," Finance Minister Christian Lindner told broadcaster Welt TV.
The parties of the "democratic center" should not give the impression that they "want to use party law to fend off unwanted competition", Lindner said.
The request to exclude Homeland from state financing was made in 2019 by the German government, together with the upper and lower houses of the German parliament.
A previous attempt to ban the party outright in 2017 failed when the constitutional court in Karlsruhe said the then NPD was not a real enough threat to be prohibited.
The German constitution was subsequently amended to introduce the possibility of withdrawing state funds.
Public money flows to any party in Germany that scores at least 0.5% in national or European elections, or 1% in regional votes.
Homeland, which was long a small but significant minority party under the NPD brand, has seen its following dwindle and dropped below the support threshold to be eligible for public funds.
But the party has still benefitted from tax advantages available to political parties, such as exemptions for donations.
AfD remains 2nd most popular party in Germany
Two recent nationwide polls of German voters both showed the far-right Alternative for Germany (AfD) remains in second place, although the party's support slipped slightly from the previous week.
A weekly opinion poll, conducted for the tabloid newspaper Bild by the INSA opinion research group and released on Tuesday, showed support for the AfD dropping from a previous high last week of 23% to 21.5%.
A separate poll for broadcaster RTL/ntv conducted by Forsa showed the AfD down by two percentage points to 20%, although that poll also showed the AfD remaining in second place.
Despite the slight downward drop, the AfD has been on a clear upward trend in polls since mid-2022.
The party has recently been the target of mass anti-far-right protests that attracted nearly a million demonstrators at the weekend in cities across Germany.
The protests follow revelations that some AfD politicians met secretly with far-right extremists in Potsdam in November to discuss plans to push immigrants out of the country, including some with German citizenship.
On Tuesday, German Vice-Chancellor Robert Habeck said that democratic parties need to show the ability to solve problems and pragmatically compromise to blunt the rise of the AfD.
"As a democratic majority, we must prove that we are capable of solving problems with a free, open democracy," Habeck said at an event hosted by financial newspaper Handelsblatt.
Habeck, a Green, also took a swipe at AfD co-chair Alice Weidel without directly naming her.
Weidel said in a recent interview with the Financial Times that the AfD would support a referendum to quit the European Union – a so-called "Dexit" – if the party fails to force drastic reforms to the EU.
Weidel told the newspaper that the United Kingdom's exit from the EU following the 2016 Brexit vote should be a model for Germany.
Habeck on Tuesday said that politics could not be much "more stupid" than saying that Germany should leave the EU and the European single market.
Both new opinion polls released on Tuesday showed the conservative opposition CDU/CSU bloc remained the strongest party, at 30.5% in the Bild poll and at 31% in the RTL/ntv poll.
Chancellor Olaf Scholz's Social Democrats (SPD) also continued to slide in the polls, down to just 13.5% in the Bild poll and 14% in the RTL/ntv poll. The Greens were backed by 12.5% or 14%, respectively.
The liberal Free Democrats (FDP) remained at 5% in the Bild poll, the threshold to receive seats in Germany's parliament, while the RTL/ntv poll showed them just below the threshold at 4%.
The far-left Die Linke's slide continued in the Bild poll, down another percentage point to just 3%. The RTL/ntv poll showed Die Linke at 4%.
Voters preferring various other parties increased sharply, from 8% to 11.5%, which may be due to growing support for the newly launched populist Alliance Sahra Wagenknecht (BSW), which was not listed separately in the poll results.
The Bild survey polled a sample of 2,000 German voters between Friday and Monday. Forsa surveyed around 2,500 people over a slightly longer period of time.
Both polls have a margin of error of 2.5 percentage points.
Election polls are generally always fraught with uncertainty. Among other things, declining party loyalty and increasingly short-term election decisions make it difficult for opinion research institutes to weigh the data collected.
In principle, polls only reflect the opinion at the time of the survey and are not a forecast of the election outcome.