German anti-euro party regroups with attack on EU federalism By Sarah Marsh ASCHAFFENBURG, Germany (Reuters) - Germany's new eurosceptic party launched its campaign for the European parliament elections on Saturday with an attack on European Union federalism and defense of national sovereignty, in an attempt to regroup after months of perilous infighting. About 300 delegates in the Alternative for Germany (AfD) gathered at a party congress in the Bavarian town of Aschaffenburg to elect its candidates for the European vote in May, where fringe parties are expected to do well. "We can only win if we stick together," AfD leader Bernd Lucke said in his opening speech, comparing his party's plight to that of David against Goliath. His speech won standing ovations but the congress was interrupted at times by booing and whistling. The established parties such as Chancellor Angela Merkel's conservatives were too "cowardly" to address Europe's conflicts and problems, said the economics professor, who was elected lead candidate for the AfD's European campaign. In a country with a clear pro-European political consensus, he was careful to say the AfD supported the EU for past achievements such as the creation of a common market. But he condemned "bureaucratic" institutions created in the wake of the euro crisis, such as a euro zone bailout fund and EU banking union, that did not even have a "whiff of democracy, subsidiary and solidarity." "Germany must remain a sovereign country, in a union of sovereign states, that is called the European Union but not the United States of Europe," Lucke said to jubilant applause. Founded less than a year ago by a group of academics and businessmen frustrated by the seemingly endless downward spiral of the euro zone crisis, the AfD originally called for the end of the euro and a return to the Deutsche Mark. But the easing of the euro crisis has forced it to scrap that demand - for now. Several delegates told Reuters a return to the mark was unrealistic but they would like to throw struggling states like Greece out of the single currency bloc. "I don't want to end the euro zone, but to restrict it," said AfD member and businessman Helmut Merrettig, 60. I've always had my worries about it. Like other delegates, Renate Glaser - one of the few women at the AfD congress - said she was worried for her children about the survival of Europe if it carried on its current path. After narrowly missing the 5 percent threshold to enter the Bundestag last year, the AfD has a good chance of making it into the European Parliament, as the threshold for entry is just 3 percent. Recent polls show its support at 4-5 percent. But the party has struggled over the past few months to contain infighting and stem an exodus of members. Analysts say it is divided between protest voters, economic liberals and social conservatives. EU parliament seats would give the AfD a platform from which to campaign at home and eat into other parties' support. "From Brussels, we will aim and fight for our party to finally be represented in the German Bundestag," said Hans-Olaf Henkel, former head of the powerful German BDI industry group. "It is crazy and a shame that Germany is the only country in the EU without eurocritics and supporters of a decentralized Europe in its parliament," added Henkel, who recently joined the party and was elected a candidate for the May vote. Political analysts say that Merkel, whose policies have shifted ever more to the centre, risks losing supporters on the far right of her Christian Democrats to the AfD, which is defining itself in a long tradition of national conservativism. "Christian values are now better represented by the AfD than by the Christian parties," said 53-year old businessman Johannes Hummel, sporting a grey suit like many of the delegates who were mainly male and middle-aged. Many AfD supporters at the congress in a sporting arena said it was important that, at last, a German party was no longer afraid of representing German interests. Critics accuse the AfD of being nationalistic - a taboo in German politics due to the crimes of the Nazi era. Cleaners were drafted in on Saturday morning to scrub off graffiti scrawled over the arena walls reading "Get lost" and "Nazis." Armed police stood braced outside the arena for clashes, while protesters, mostly young people, brandished posters reading "Fight racism" and "Right-wing populists." Addditional reporting by Peter Maushagen; editing by Erik Kirschbaum and Andrew Roche