BERLIN, Jan 8 (Reuters) - German farmers kicked off a week of nationwide protests against subsidy cuts on Monday, blocking roads with tractors and piling misery on Chancellor Olaf Scholz's coalition as it struggles to fix a budget mess and contain rising far-right forces.
Convoys of tractors and trucks gathered on roads in sub-zero temperatures in nearly all 16 federal states, while protesters clashed with police and leading politicians warned that the unrest could be co-opted by extremists.
The protests have forced Scholz's unpopular government into a tricky balancing act, trying to keep a lid on the unrest while sticking to fiscal discipline after a constitutional court ruling in November threw its spending plans into disarray.
"No beer without farmers," read one protest banner, while another tractor had a poster from the far-right Alternative for Germany (AfD) party that read "Our farmers come first."
Vice Chancellor Robert Habeck, whose return from holiday last week was disrupted by furious farmers trying to storm the ferry he was on, warned in a video message on Monday that farmers' right to protest could be exploited by fringe groups.
"Calls are circulating with coup fantasies, extremist groups are forming and ethnic-nationalist symbols are being openly displayed," said Habeck.
Farmers called the protests in response to the government's decision to phase out a tax break on agricultural diesel as it tries to bring its 2024 budget over the finish line while complying with the constitutional court ruling.
"For a farm like mine, I would lose about 10,000 euros," said a farmer from Bavaria, Ralf Huber. "For our businesses, it's a catastrophe."
The far-right AfD party, hoping for major gains in a string of state elections this year, backs the protest, using it as proof of Germans' dissatisfaction with current leadership.
Hermann Blinkert at the German Institute for New Social Answers (INSA) said the government was in a bind because it looks bad if it backtracks completely on cutting farm subsidies, but also if the dispute continues.
Earlier backlash from farmers prompted Scholz's coalition last week to make unexpected changes to the budget. But farmers say this does not go far enough.
"The government has the problem that it has already gambled away the trust of the population," Blinkert said.
"Only one in three voters would currently elect one of the three governing parties."
The protests add to the challenges facing a tense coalition that has seen the climate-friendly Greens fighting for different budget priorities than the pro-business FDP and centre-left Social Democrats as the country struggles with a recession.
The AfD is currently polling at 23%, according to the weekly INSA poll, comfortably ahead of Scholz's SPD and his two coalition partners, the Greens and the Free Democrats.
PROTESTS SPUR WARNINGS
Ministers and a domestic intelligence chief have warned that the right-wing extremists could try to exploit the protests.
According to German media outlet Spiegel, members of several right-wing extremist groups, including The Homeland and Third Way, were at a rally in Berlin, as were AfD members. In Dresden, a video on social media showed people carrying flags from the Free Saxony right-wing extremist party clashing with police.
Stephan Kramer, head of the domestic intelligence agency in Thuringia - one of three eastern states where the AfD looks likely to make gains in elections this year - said right-wing extremists' strategy was to hijack protests.
In the past, they have "constantly and consistently tried to infiltrate every form of legitimate civil protest," Kramer told business daily Handelsblatt, pointing to the 2015 migrant influx and the COVID-19 pandemic as examples.
Police said roads and highway slip roads were blocked in multiple locations nationwide, including several border crossings with France, causing traffic jams most of the day.
The protests brought Volkswagen's production lines at its plant in the north-western city of Emden to a standstill, a spokesperson for the carmaker said.
Farmers say that government plans to end two tax breaks - which currently save them about 900 million euros ($980 million) per year - unfairly burdens them and will drive them out of business.
($1 = 0.9152 euros)
