GERMANY: The German Chancellor, Mr Gerhard Schröder, is facing a revolt from unions and from within his own party over his plans to reform and stimulate the German economy.
Union leaders and left-wing members of the Social Democrats (SPD) say proposals to cut social welfare and increase self-payments to health insurance, announced by Mr Schröder on Friday, are socially imbalanced and unfairly target the poor, sick and the elderly.
"The cuts announced in the Chancellor's speech are scandalous. Cuts are being made without sense or understanding," said Mr Peter Vetter, president of the German Social Federation.
The greatest opposition surrounds plans to abolish automatic entitlement to long-term sick pay, until now paid by Germany's health insurers.
"Workers have paid their health insurance premiums, in some cases for decades. To cut sick pay from health insurance attacks their rights of ownership," said Mr Vetter. "We will strive to lodge test cases and, if necessary go to the constitutional court."
Mr Michael Sommer, head of the German Union Federation, called the proposed cuts "immoral".
He said his organisation would also consider legal action to preserve workers' entitlements to sick pay.
Mr Schröder's long-awaited speech on Friday was greeted with near unanimous disappointment and criticism. He reportedly told staff earlier: "If I am criticised from both sides, then I am exactly right."
"Is that all?" asked the front page of Bild, Germany's best-selling newspaper, on Saturday. It had been calling for tax cuts to bring relief to German workers.
Mr Schröder's speech, which he said would "cause wailing and gnashing of teeth", proved unexpectedly tame with a mixture of social welfare cutbacks, loosening of the hire-fire laws and a €15 billion infrastructure investment programme.
It was designed to overcome Germany's Reformstau - reform blockade - by stimulating the near- stagnant economy and reducing the 11 per cent unemployment rate, the third-highest level since unification.
However, a spokeswoman for the SPD's left wing said yesterday that the reforms were "imbalanced" and would be "very difficult for the left-wing to endure".
The SPD parliamentary party, more than 70 per cent of whom are trade union members, have sought clarification in a meeting with the party chairman, Mr Franz Münterfering.
He has rejected claims that the proposed reforms are imbalanced.
"Those with broad shoulders will carry more than those with narrow shoulders. The plan is socially symmetrical," he said of the reforms, expected to become law before the summer.
