Well, from what I read, not really, they are just addressing the issue, Bolkestein and such, while the main parties happily jump to paint them as xenophobic. But they walk a thin line. (Lafontaine said that they want to draw away voters from the far-right ratcatchers by talking seriously about issues the main parties won't address and the far-right uses for demonisation.)

_{*Lunatic*, n.
One whose delusions are out of fashion.}

Lafontaine is absolutely playing for the extreme right wing vote. He is using extreme right wing vocabulary (Fremdarbeiter), saying that the Nazis weren't really hostile to foreigners, and talking about how horrible it is that the good German family fathers and mothers end up losing jobs to 'immigrants' (until a couple years ago it was extremely difficult for non-ethnic Germans to get citizenship, meaning that even if you were born in Germany to immigrant parents you still often don't have German citizenship and are technicallly considered an 'immigrant').

In his most recent book he calls immigration a plot forced on the Germans by elements of the elite. He says he wants to strip citizenship from insufficiently assimilated Turks (along with rich people who aren't paying there fair share of taxes). To highlight the danger of immigration he speaks of America where, horror of horrors, whites are in danger of losing their majority status within a couple years and even now you can see the scary sight of politicians using foreign languages to seek immigrant votes and how if Europeans aren't careful such nightmare scenarios might play out in Europe as well.

This is why one of the leading East German SPD politicians called him a 'hatemonger' (Hassprediger), Fischer refers to him as the German Haider, and a foot in the mouth type East German CDU pol talked of siccing the Office for the Protection of the Constitution on him. (Germany's sort of equivalent of MI-5 which among other things has the task of monitoring and fighting right and left wing extremists.)  That last is ridiculous, but Lafontaine is playing on the full spectrum of resentment of Germans frustrated with the economic stagnation and that includes some very ugly sentiments alongside some perfectly understandable ones.

For a German language analysis of this side of Lafontaine's political views see:
Oskar Haider