MADRID (Reuters) - Europe must stop its austerity policies or watch far-right movements continue to grow and pose a real danger to democracy, said Pablo Iglesias, leader of Spain's Podemos party that like Greece's Syriza aims to offer a leftist alternative.
In an interview with Reuters, the 36-year-old whose Podemos ('We Can') party is leading some election polls, also said any coalition between Spain's centre-right and centre-left would only prolong what he called the country's economic disaster.
Spain is emerging from a seven-year economic slump as one of the euro zone's fastest growing nations. But the exit from recession has yet to ease the hardship for millions of households and nearly one in four of the workforce is still out of a job.
A weariness with austerity has made voters across Europe susceptible to the rhetoric of anti-immigrant right-wing parties that are playing to their discontent with suggestions that the European Union has let them down.
While the far-right has made little ground in Spain - public unhappiness has translated instead into anti-capitalist and anti-establishment movements - Iglesias said he was concerned about the increased attraction for some voters of movements like Greece's Golden Dawn and France's National Front.
"It is very important to accept the hand outstretched by those like us who are pro-European, those who defend the European project," said Iglesias, a university professor, from his office overlooking the Square of Spain in central Madrid.
Otherwise, he warned: "Perhaps in one year's time (France's far-right leader) Marine Le Pen will have a seat at the Eurogroup. One should ask (German Chancellor Angela) Merkel if she'd rather sit down with Marine Le Pen or with me."
He told Reuters that while Podemos was cautious of opinion polls that put the party ahead of the ruling's People's Party (PP) and the opposition Socialist Party, it is nonetheless aiming to win an absolute majority in the general election that is expected to take place by the end of the year.
"I have the impression that if it doesn't happen there could be in this country a grand coalition like those which have ruled in so many other European countries," Iglesias said.
"They would continue the policies that have taken us to disaster."
Spain's one trillion-euro debt is nearly 100 percent of GDP and interest payments are becoming one of the biggest parts of the country's national budget.
Podemos has called for a restructuring of the debt and while Iglesias acknowledged this and other economic steps could face resistance - Greece's new Syriza government is struggling to wrest control of economic policy from international creditors - he said the EU would have to listen "seriously" to its fourth-biggest economy.
"The austerity policies are taking us closer to chaos and we can do things better than what has been done," he said.
Podemos, which produced a major shock by winning five seats in elections for the European Parliament in May last year, plans to achieve economic growth by boosting public spending and internal demand.
It has said in its election manifesto it would reform the tax system to shift the burden from labour to capital, hike tax rates for the wealthiest and give tax inspectors greater powers to fight tax evasion and increase the government's revenues.
The party came under fire for pledging to default on the national debt and nationalize the country's main utilities.
Since then it has rowed back on those pledges in a move that analysts say demonstrates its ambition to capture centre-left votes too.
In addition to now saying it would talk to creditors about debt restructuring, Podemos says it would discuss with energy and water companies how to provide a cheaper service for those who are in a situation of poverty.
Iglesias said he would also make a priority of stopping house evictions.
A recent poll showed one in four who voted for the socialists in 2011 would cast their ballot for Podemos if the election was held today. In the case of the former communists of Izquierda Unida, the ratio would be closer to one in two.
Pony-tailed Iglesias, who was known for his frequent appearances on political TV shows before founding Podemos a year ago, said last month the party was now the only real opposition to the centre-right government of Rajoy.
A Metroscopia poll released by Spanish newspaper El Pais on Sunday showed Podemos would win a general election if it was held today, ahead of the socialists, the PP and other anti-establishment party Ciudadanos, for which support has also surged in recent months.
Editing by Sophie Walker