Germany quakes before Berlusconi

Germany's political establishment is in uproar at the prospect of Italy's Silvio Berlusconi taking a significant stake in the German media as he and other tycoons, including Rupert Murdoch, circle the floundering Kirch newspaper and television empire.

The Italian Prime Minister's control over mass communication at home – both directly, through his TV and publishing interests, and indirectly, through the state-controlled media – has been likened to that of the fascist era. His appearance on the German scene has spooked the Social Democrat-Green national coalition, which is facing a general election in September. Mr Murdoch, accustomed to playing the bogeyman, is for once being seen as the lesser evil.

Despite an initial refusal to take a public stance, even Chancellor Gerhard Schröder broke his silence last week. It would be "not unproblematic", he told Der Spiegel magazine, "if the prime minister of a friendly country were to have influence over the German media through his private businesses". At the very least, a "convincing separation of politics and business" would be necessary.

Leo Kirch, 75, a conservative southern German, built his business from scratch to the point where it owns several of the most popular private TV channels in Germany, as well as stakes in leading newspapers and magazines. But his group is sinking under huge debts, despite hefty support from banks run by the right-wing state government of Bavaria. The most likely outcome is that Mr Kirch will be elbowed aside and his empire carved up between Messrs Berlusconi and Murdoch.

The Social Democrat mayor of Munich, Christian Ude, said the Italian Prime Minister, who recently appointed himself Foreign Minister as well, was "a politician on the right-wing edge of the European Union", whose name stood for the "combination of political power and private business interests".

Opposition to Mr Berlusconi acquiring part of the Kirch empire is gathering momentum, with the influential Prime Minister of North Rhine Westphalia, Wolfgang Clement, referring the matter to constitutional lawyers. "It is outrageous," he said, "that a man who runs around 90 per cent of the Italian television market and a large part of the print media there, now could get a similar influence on the German media market."

Left-wing indignation is fuelled by the fact that Mr Schröder's challenger for the Chancellorship this autumn is the Christian Social Union leader, Edmund Stoiber. Not only has the leader of Bavaria's state government been a close political ally of Mr Kirch, he is a friend and political soulmate of Mr Berlusconi.

Mr Stoiber cannot afford for the Kirch group to go under. It is not just that he profits from its conservative stance, but also its collapse would cost Bavaria too much taxpayers' money. Despite an uncharacteristic silence from his office, he would probably be far from distressed to see the media empire rescued by fellow right-wingers such as Mr Berlusconi and Mr Murdoch.

"Let's just say Berlusconi's business and political interests are very close to each other," said a senior source in the Munich mayor's office. "He would not have a majority stake, but he and Murdoch are on the right of the political spectrum, let's formulate it that way."