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Germany: SPD Backs Reforms Giving Economy, Schroeder, A Boost

German Chancellor Gerhard Schroeder over the weekend won the endorsement of members of his Social Democratic Party for controversial economic-reform plans. About 90 percent of delegates at a special party conference in Berlin backed the reforms. However, some party members say they will fight the reforms when they are presented in parliament later this year. RFE/RL reports Schroeder may need the support of opposition parties to win parliamentary approval.

Munich, 2 June 2003 (RFE/RL) -- German Chancellor Gerhard Schroeder's goal is to reduce unemployment by making the labor market more flexible -- in other words, make it easier for companies to fire and hire workers. That was the aim of an hour-long address Schroeder made yesterday in Berlin to a special conference of his Social Democratic Party (SPD).

"We must have the courage to recognize that the number of unemployed has climbed to more than 4 million -- not only for economic reasons. There are also structural problems...problems that we must recognize and eliminate," Schroeder said.

Economists for years have said Germany can no longer afford its relatively generous system of unemployment benefits and job guarantees that make it reluctant for companies to take on additional workers.

The cost of the system has become increasingly apparent as the number of unemployed workers has risen above 4 million and the economy remains stagnant.

"Agenda 2010," the name of Schroeder's reform plan, is intended to attack these ills. Among other things it gives employers the right to fire workers, slashes unemployment benefits for those under 55, and restructures Germany's expensive system of medical coverage.

Schroeder acknowledged the measures are unpopular. "We are going to have to bid farewell to some of the things we love, which are too expensive," he told the congress. But he made it clear that he intends to go ahead regardless of opposition from within his own party.

Many economists regard Agenda 2010 as no more than a modest start to a long-overdue reform process and that additional steps are needed if the country is to return to economic health. But left-wing members of Schroeder's SPD angrily declared the chancellor had betrayed the party's traditional support for the workers and the poor.

The leader of the opposition within the SPD, Ottmar Schreiner, told the congress that Schroeder's plans would not resolve Germany's problems and would only make them worse. He led those charging that Schroeder had deserted traditional social-democratic values.

Despite the opposition, Schroeder's proposals were approved by about 90 percent of the delegates.

The ideas expressed in the Agenda 2010 will now be formulated into a series of laws and sent to the national parliament. Schroeder said today he hopes the first readings of some of the laws can be completed before parliament begins its summer recess early next month.

The SPD opposition vowed to fight the proposals when they come up in parliament, but they left unclear whether they would actually vote against them.

Schroeder today appealed to members of his party to accept the changes and support them. "Those who believe that everything can remain as it is are deluding themselves. Worse, they are deluding others," he said.

Schroeder may get unexpected help from the opposition Christian Democrats. Leaders of that party have said recently they will not stand in the way of an economic-reform program, although they do not believe that Agenda 2010 goes far enough. In any case, Schroeder must depend on the Christian Democrats in the upper house of parliament, the Bundesrat, where he does not have a majority.

Schroeder has hinted he may go further to meet Christian Democrat demands in November when he is expected to present his next list of proposed economic reforms.