Schroeder sticks toeconomic reform agenda

25 March 2004

BERLIN – Defending unpopular changes in Germany’s tax and welfare system, Chancellor Gerhard Schroeder told parliament Thursday that the economy was now on the path to recovery, but the opposition demanded he resign.

“Germany is a lot better off now than just 12 months ago,” he asserted. The reforms will go on with the aim of “leading Germany to new strength”.

“We Germans are ready and able to reform our country and overcome selfishness,” Schroeder told the Bundestag in a reference to the campaigns by special interest groups to block reforms that do not suit them.

Few Germans realized what was in store one year ago when Schroeder announced a catalogue of reforms entitled “Agenda 2010”. But the public was angry when it was discovered that familiar tax breaks and free visits to the doctor were to be abolished.

For months, Schroeder’s Social Democrats (SPD) have had only 25 percent support in polls with the economy stuck in the doldrums.

Angela Merkel, leader of the opposition Christian Democrats (CDU), termed Schroeder “out of touch” and demanded he resign and call a general election “for Germany’s sake”, saying this was “the best solution”.

She offered to negotiate a programme of reforms with Schroeder “starting tomorrow” as “the second-best solution” as part of a “national reform effort”.

Schroeder had appealed in his speech to the opposition to work with him on the restructuring, saying Germany once again had to become a driving force for European integration and to become a “self-confident but not arrogant member of the family of nations”.

In a wide-ranging statement of policy, Schroeder publicly stated for the first time Germany’s demand for a permanent seat in the UN Security Council.

“It can only fulfil its role if it becomes more representative than now,” he said. “Major countries of the ‘South’ should receive one permanent seat and the same applies to the industrialized nations which contribute to the preservation of world peace.

“Germany is prepared to accept responsibility as a permanent member of the Security Council.” Previously, Berlin’s interest in a seat has been couched in vaguer, diplomatic language.

The opposition sees Schroeder’s power as waning. On Sunday, he gave up leadership of the SPD, with the task going to a trusted aide, Franz Muentefering. The chancellor cannot pass most legislation because the upper house or Bundesrat is controlled by his opponents.

Many of the reforms he announced on 14 March last year have been stymied by the Bundesrat, and his welfare reforms are being fought every inch by the trade unions, traditionally SPD supporters. No major new reforms were announced in the Thursday speech.

Schroeder picked up the growing controversy about executive pay, saying a “few hundred” German top earners were awarding themselves salaries in the millions of euros.

“That may be legal, but it does not conform with morals and propriety,” he told the Bundestag, as it was announced in Frankfurt that Deutsche Bank chief executive Josef Ackermann was paid EUR 11.1 million last year.

DPA

Subject: German news