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Germany

Schröder Faces Showdown Over Labor Market Reform

German Chancellor Gerhard Schröder is to meet premiers of eastern German states on Monday in Berlin to mobilize support for his latest round of labor market reforms. The reform, which involves a pooling of unemployment and social welfare benefits, is deeply unpopular among the former communist east German states. The eastern premiers, who refused to endorse the law in the upper house of parliament last week, have accused Schröder of being too insensitive to the needs of their states which are still struggling to catch up with their western counterparts since reunification in 1990. "We have three to four times as many welfare and unemployment recipients in the east as compared to the west and that's why it's a special situation," said Dieter Althaus, premier of the state of Thüringia. Schröder however has made clear that he will not make any exceptions. "The law has been decided and is binding on all," he said.

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