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Germany's spy agency on Friday classified the far-right Alternative for Germany (AfD) as "extremist", enabling it to step up monitoring of the country's biggest opposition party, which decried the move as a "blow against democracy".
A 1,100-page report by experts found that the AfD is a racist and anti-Muslim organisation, a finding that grants the security services powers to recruit informants and intercept party communications.
"Central to our assessment is the ethnically and ancestrally defined concept of the people that shapes the AfD, which devalues entire segments of the population in Germany and violates their human dignity," the BfV domestic intelligence agency said in a statement.
"This concept is reflected in the party’s overall anti-migrant and anti-Muslim stance," it said, adding that the AfD had stirred up "irrational fears and hostility" towards individuals and groups.
The BfV agency needs such a classification to be able to monitor a political party because it is more legally constrained than other European intelligence services, a reflection of Germany's experience under both Nazi and Communist rule.
The agency was able to act after the AfD last year lost a court case in which it had challenged its previous classification by the BfV as an entity suspected of extremism.
The AfD denounced Friday's decision as a politically motivated attempt to discredit and criminalise it.
"The AfD will continue to take legal action against these defamatory attacks that endanger democracy," co-leaders Alice Weidel and Tino Chrupalla said in a statement.
The decision could put public funding of the AfD at risk, while civil servants who belong to an organisation classified as 'extremist' face possible dismissal, depending on their role within the entity, according to Germany's interior ministry.
The stigma could also hamper the ability of the AfD, which currently tops several polls and is Germany's most successful far-right party since World War Two, to attract members.
HEATED DEBATE
The BfV decision comes days before conservative leader Friedrich Merz is due to be sworn in as Germany's new chancellor and amid a heated debate within his party over how to deal with the AfD in the new parliament.
The party won a record number of parliamentary seats in Germany's national election in February, theoretically entitling it to chair several key parliamentary committees.
A prominent Merz ally, Jens Spahn, has called for treating the AfD as a regular opposition party in parliamentary procedures, arguing that this approach prevents the party from adopting a 'victim' narrative.
However, other established parties as well as many within Spahn's own conservatives have rejected that approach - and could use Friday's news as justification for blocking AfD attempts to lead key committees.
"There is tension between a party’s claim to chair positions based on its size and the freedom of conscience of the members of parliament," said political scientist Wolfgang Schroeder at Kassel University.
"Now, these members can argue that AfD representatives do not meet the necessary standards. The signs are mounting that the AfD is not a normal party, and as a result, it will continue to be marginalized."
The German parliament could attempt to limit or halt public funding to the AfD - but for that authorities would need evidence that the party is explicitly out to undermine or even overthrow German democracy.
The classification could also reignite efforts to get the AfD banned, but Germany's outgoing chancellor Olaf Scholz, whose Social Democrats will be the junior partner in Merz's new coalition, advised on Friday against rushing to outlaw the AfD.
"I am against a quick shot, we have to evaluate the classification carefully," he said at a church convention in the northern city of Hanover.
Created to protest the euro zone bailouts in 2013, the eurosceptic AfD morphed into an anti-migration party after Germany's decision to take in a large wave of refugees in 2015.