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Germany

Rambo in the Labor Office?

The unemployment rate in Germany continues to rise. But the man who wants to overhaul the country's federal Labor Office has come under fire for his sweeping reform plans.

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Florian Gerster plans to reform the labor office.

Florian Gerster, the man who is due to reform Germany's federal Labor Office, has stirred up a political storm even before officially taking office.

Gerster has proposed that unemployment benefits should be reduced for certain groups in the work force, namely older people and those who have been out of a job for a long time.

Since Gerster floated these reform plans last weekend, Germany's opposition parties and trade unions have been up in arms. And even members of the German government have now distanced themselves from Gerster's proposal to reform the labor market.

Chancellor Gerhard Schröder's Social Democrats and Germany's Greens say Gerster's suggestions do not reflect government policy.

Reform plans

The principal idea behind Florian Gerster's proposals is to make it less attractive for unemployed workers to remain on the dole. But Germany's powerful unions and the country's opposition were quick to point out that this was unjust.

Angela Merkel, head of Germany's largest opposition party, the conservative CDU, said the older workers had a right to unemployment benefits. "These workers have paid into the unemployment insurance system, and it's not right that the costs of the first reforms should be borne by the older workers," Merkel said.

Reforms needed

Germany's system of getting people off the dole is in urgent need of reform. Hardly anyone doubts that.

Last month, a scandal in the country's federal Labor office forced the head of the institution Bernhard Jagoda to declare his resignation. Jagoda had for a long time doctored and embellished Germany's job placement statistics. An audit office report found that 70 percent of supposed job placement successes at five regional offices were fake.

In the wake of the scandal it became clear that out of the 90.000 employees of the federal Labor Office, only 10 percent were actively engaged in trying to help fill vacancies.

A little over a week after the scandal broke, Jagoda resigned and Schröder quickly announced Gerster as his replacement. His charge: to restructure Germany's largest federal organization.

Though Gerster has fallen out of favor with some, Schröder seems to have understood that reforms can be painful for some: "It was never intended for Mr. Gerster to be just an administrator. He has always been and should continue to be a person who comes up with ideas. And a man who says what he thinks."

Election issue

This year is an election year in Germany and unemployment is one of the most hotly contended issues of the campaign. Each month, rising jobless figures spell a headache for the Schröder government.

Gerhard Schröder had started his term as chancellor in 1998 by promising the Germans he would reduce unemployment. Now the slump in the economy has made that promise null and void.

The jobless figures for the month of February are due out on Wednesday. They're likely to spell more gloom for the government. Unemployment may have breached the psychologically significant mark of four million in February.

But with the global economy slowly picking up again, many analysts expect February to represent the peak in unemployment before Germany's September 22 general election.

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