GERMANY: Chancellor Gerhard Schröder was savouring victory last night after successfully pushing though parliament a landmark reform package to kick-start the stagnant German economy, writes Derek Scally in Berlin
The measures to reorganise Germany's employment market, with reduced dole payments and a reformed state employment agency, passed the lower house by a comfortable majority after six Social Democrat (SPD) rebels reconsidered their veto threat.
Mr Wolfgang Clement, the hard-nosed economics and labour minister, introduced the proposals to the Bundestag in Berlin yesterday by calling for "a new way of thinking about employment policy. Those who reject acceptable jobs offered to them cannot expect to receive public support," said Mr Clement at the start of a lacklustre two-hour debate in which even Chancellor Schröder declined to participate.
Germany is in a dramatic economic situation with near zero economic growth and over four million out of work. Nevertheless, yesterday's vote passed only after months of soul-searching and bitter debate within the ranks of the SPD.
The matter was finally settled after Mr Schröder linked his political future to the passing of the reform package, a tactic which, for the ninth time, won the vote.
The party's left-wing and the unions were strongly opposed to plans to increase pressure on job-seekers to take up jobs and to merge dole and social welfare payments, effectively a cut in payments to around €330 per month for over 2.7 million people.
These more controversial proposals require the backing of the upper house, the Bundesrat, something that will happen after further negotiations with the Christian Democrat (CDU) majority.
Leading CDU politicians attacked the government's measures as superficial yesterday, particularly plans to reorganise the state employment office. "You can't fight the cancer of unemployment with camomile tea," said Mr Johannes Singhammer, a social welfare spokesman.
The Bundestag also voted yesterday to increase cigarette duty and to introduce €15 billion worth of tax cuts next January in the hope of stimulating the economy.