Top German politicians bicker over Arcandor aid

FRANKFURT, May 31 (Reuters) - German politicians duelled in weekend newspaper interviews over the merits of supporting troubled retailer Arcandor (AROG.DE: Quote, Profile, Research), which has warned it could go bust within weeks without more than $1 billion in state aid.

The head of the Social Democrats (SPD), ruling partners with Chancellor Angela Merkel's conservatives, supported offering a state crutch, but a leading conservative opposed it, heightening the rift in Berlin over who deserves a bailout and why.

While requests for state support need to be judged case by case, companies such as carmaker Opel GM.N and Arcandor are too important to go bust, SPD Chairman Franz Muentefering argued.

"Hopefully this is not controversial for core industries like Opel and we have to help retailer Arcandor as well. We will try," he was quoted by the Bild newspaper as saying.

"The guarantees at stake here strike me as necessary and oriented toward the future. We cannot forget that several thousand jobs -- primarily for women -- in the important services sector are riding on this."

While he acknowledged that management errors had contributed to Arcandor's parlous state, he said staff should not be punished for this.

Vice-Chancellor Frank-Walter Steinmeier, the SPD candidate running against Merkel in September elections, told Bild am Sonntag that the failure of Arcandor's Karstadt stores could devastate inner cities across Germany and cost 50,000 jobs.

"I will commit myself to finding a forward-looking solution for the entire department store sector in Germany. Karstadt and Metro should speak to each other as equals about this," he said.

He was referring to Arcandor's talks with Metro (MEOG.DE: Quote, Profile, Research) over merging their department store chains, a plan Metro says could head off state aid for its rival but which Arcandor insists can only complement state support.