CHANCELLOR Helmut Kohl yesterday unveiled an ambitious plan to cut German unemployment by half before the year 2000. He intends to do this by lowering labour costs for employers and obliging workers to take more responsibility for their own health care and pensions.
The programme was agreed with employers' representatives and trade union leaders at a four hour meeting on Tuesday evening amid fears that 4 million Germans, 10 per cent of the workforce, will soon be out of work.
While Dr Kohl's aides hailed the agreement as "unique in Europe", economic experts reacted more skeptically and employers warned against raising unrealistic expectations at a time of sluggish economic growth.
Social security contributions will be drastically reduced under the plan through a combination of cuts in some benefits and a shift towards taxation to finance training schemes. Trades unions have agreed to pay restraint and to reduce overtime in order to create more jobs.
"Of course we'll need a bit of luck. But if we all make an effort, it's achievable," the Economics Minister, Mr Guenter Rexrodt, said at yesterday's publication of the eight page document.
Opposition parties gave the plan a cautious welcome but the Social Democrats' chairman, Mr Oskar Lafontaine, said he wanted to study the details before making a final judgment. The plan is expected to be fine tuned in negotiations between now and February 12th.
The government is particularly determined to tackle rising unemployment and to secure the competitiveness of German industry in the light of the recent wave of social, unrest in France.
"Let us work together in order to spare ourselves from events like those in France," the Labour Minister, Mr Norbert Bluem, urged.
But German politicians of all parties have been playing down the significance of Germany's economic difficulties for the future of the European Monetary Union. The Social Democrats' parliamentary leader, Mr Rudolf Scharping, told The Irish Times that the Maastricht timetable must be maintained regardless of current difficulties.
"You must remember that we are talking about solemn treaties agreed between sovereign states and you can't just abandon them because the mood changes," he said.
