NPD gets fined

The ruling upholds a decision by the German parliament in April, but halves the original penalty of 2.5 million euros imposed on the NPD by lawmakers for filing erroneous financial returns.

The court ruling means the NPD, which receives public money because of seats it holds in state parliaments, must pay the sum by May 1.

Although much lower than feared, the fine could yet prove fatal to the extremist party, which, as leader Udo Voigt admitted in March, is suffering from what he called an "existential crisis" due to a lack of funds.

The German parliament has already blocked 300,000 euros in public money due to be paid to the party as a result of the court order. That leaves the NPD with just under one million euros to pay on the fine.

The party faces an uncertain future

The fine means that the party will be lacking campaign funds ahead of regional and federal elections coming up later this year.

The NPD is described by the Verfassungsschutz, Germany's domestic intelligence service, as "racist, anti-Semitic and revisionist." The party has approximately 7,000 members and is represented in two state parliaments, Mecklenburg-Western Pomerania and Saxony, and several local councils, but not at the national level.

Political analysts have said the far-right party could make gains if the financial crisis goes on for much longer, or brings more job cuts. The head of the Verfassungschutz, Heinz Fromm, has said the NPD is stepping up efforts to use the global crisis to underline what it has called "the failed policies" of the German government.

An attempt in 2003 to ban the party altogether failed, but there have been a number of recent appeals to explore that possibility again.