Skip to comments.German leaders warn that welfare-state comforts may be trimmed
Posted on 12/24/2002 6:45:53 AM PST by Oldeconomybuyer
BERLIN, Dec 24, 2002 (AP WorldStream via COMTEX) -- Chancellor Gerhard Schroeder warned Germans on Tuesday that "drastic changes" were needed to preserve the country's costly social safety net, but he stopped short of proposing specific cuts in benefits.
Schroeder's popularity has plunged since he revealed a federal budget gap and sought higher taxes after his narrow Sept. 22 re-election, and the comments in a Christmas Eve newspaper interview appeared designed to test the waters for further unpopular measures.
"I am convinced that the welfare state system in Germany can be secured in the long term only if one finds the readiness and strength for drastic changes," Schroeder told the Sueddeutsche Zeitung. That includes social programs and Germany's tightly regulated job market, he said.
Reforming the national system of health, jobless and old-age benefits, overseen by the government and funded jointly by companies and employees, is shaping up as a critical challenge for Schroeder's second term. But his government and others since the 1970s have largely failed to rein in the cost.
Any attempt to loosen job protection rules or reduce the influence of unions on pay bargaining is certain to set off protests from organized labor, closely allied with Schroeder's Social Democratic party.
And a leaked strategy paper on health insurance drafted by Schroeder's chancellery aides this week triggered dissent within the government from foes of the proposed reforms - having people pay more out of their own pockets for health care and allowing them to choose the range of benefits they want.
German President Johannes Rau, in a televised address airing Christmas Day, also called for painful reforms "that affect every individual and will be felt in all of our lives."
But he also urged Germans to stop complaining and open up to change, criticizing "much silly talk suggesting that Germany is about to sink."
"We in Germany have not lost all of our qualities and strengths overnight," Rau said. "No doubt: We are facing serious problems. It does not help when everybody complains about someone else."
In that spirit, Germany's top-selling daily - which has sharply criticized Schroeder in recent months - devoted its entire Christmas Eve edition to what it said was good news.
On its front-page, the newspaper trumpeted an article quoting experts as saying that Germany's economy, the biggest in Europe but currently stuck at near-zero growth, will recover next year.
What an idoit Gerhart is.
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