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Germany: Demonstrations Growing Against Labor Reforms

  • Breffni O'Rourke

Tens of thousands of Germans have taken to the streets, protesting joblessness and planned cuts in unemployment benefits. The demonstrations have taken place in several cities in the economically depressed eastern part of the country. Despite the protests, the government of Chancellor Gerhard Schroeder says it will not back down on the cuts, which will reduce benefits for long-term jobless to the level of social welfare payments. As RFE/RL reports, the protests are raising doubts about the government's will to carry through with further elements of its labor reform package, which economists say are urgently needed.

Prague, 17 August 2004 (RFE/RL) -- Resistance appears to be growing among German workers to Chancellor Gerhard Schroeder's planned reforms of the labor market and unemployment benefits.

This week saw an estimated 40,000 jobless people out on the streets of eastern German cities, protesting cuts in benefits for the long-term unemployed that are due to take effect in January.

The decision by eastern German workers several weeks ago to stage regular "Monday demos" has stirred emotions among both supporters and opponents of the reform package. The use of the term "Montagsdemos" adds extra spice to the situation, because that is the name given to the succession of mass gatherings in Leipzig in 1989 that eventually brought down the communist East German regime.

Economic analyst Udo Ludwig of the Institute for Economic Research in Halle told RFE/RL that the demonstrators are refusing to face reality. "The people just don't want to realize that Germany needs painful reforms so as to be stronger economically again," he said.

The cuts will do away with generous provisions that presently ensure that an unemployed person receives 67 percent of his or her last salary for the first year out of work, falling to 60 percent in subsequent years. Instead, under a law called Hartz 4, a flat-rate monthly payment of approximately 340 euros ($419) will be paid, which is at the level of the present social-welfare payment.

Ludwig said the workers are being shortsighted and are ignoring the main aim of the reforms, which is to create new jobs by offering employers more flexible terms when hiring and firing workers. "That idea won't go into the heads of the demonstrators," he said. "They see a drop in their incomes ahead through the new jobless benefits rules -- which is anyway not true, because in most cases the new payments will not be lower than the amounts they have been receiving previously. There is a great deal of false information being spread around."

In the city of Magdeburg, where the current series of Montagsdemos began, Bernhard Becker of the German Trade Union Federation (DGB) defends the demonstrators. He said they have not lost their sense of reality. "They just don't believe that the Hartz regulations will improve anything," he said. "Instead, they feel that political expression is being denied them, that they are being played with, and marked down as second-class citizens."

Becker sees the planned changes to the benefits system as having a major social impact, particularly among middle-class families, whose incomes under the flat-rate system could decline dramatically if the main wage earner loses his or her job. "The part of society which belongs to the middle class, but which is without work, will be pushed out of that niche and will end up in the lowest levels of society," he said.

Becker also said the new measures are hitting unfairly at the east Germans, who suffer much higher levels of unemployment than their west German counterparts. In addition, those living in the east for the past two generations found it more difficult to acquire material assets under communist rule.

"There is a sense of injustice prevailing in eastern Germany, that savings are being made [by the government], so to say, at the expense of the poor and those with less prosperous backgrounds, while those with accumulated wealth are not affected," Becker said.

The increasingly unpopular Schroeder government is seen as unlikely to back down on the new benefit laws. But political analysts say the importance of the eastern demonstrations --- which have been growing in size each week -- is that they could well discourage the coalition in Berlin from proceeding further with labor reforms until after the 2007 general election.
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