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Germany

Social Democrats Approve Coalition Plan

Chancellor Schröder’s Social Democrats voted nearly unanimously in favor of the coalition agreement with the Greens. The four-year plan outlines the government’s goals for improving the economy and cutting unemployment.

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The SPD endorsed the red-green coalition agreement on Sunday

Amid heated criticism from the conservative opposition and industry leaders, Germany’s Social Democrats on Sunday voted overwhelmingly in favor of the government’s new four-year program for reviving the floundering national economy, reducing the growing level of unemployment, and trimming the fat off the expanding budget deficit.

The 522 SPD delegates gathered in Berlin gave a near unanimous vote of approval for what Chancellor Gerhard Schröder calls a "balanced" plan which "fairly distributes the sacrifices that we are forced to ask of the people because of global economic difficulties."

Prepare for sacrifices

In an hour-long fiery speech, Schröder admitted that the challenge to get the economy back on the right track would be the most difficult of his administration. He told his party and Germans in general to be prepared for sacrifice during tough economic times ahead and defended the government efforts to plug the gaping whole in the country’s deficit against attacks from the Christian Democrats and industry.

"Everyone will have to make a contribution (to trimming the budget deficit), but people voted for us because they know we will distribute the burden justly," Schröder announced to the SPD delegates.

Schröder said that the country’s weak economic growth – expected to be well below one percent this year – was cutting into state revenue. As a result, the government was calling for budget cuts, tax hikes and the reduction of special tax exemptions, which mainly benefit high-earners and big corporations.

"Poison" for the ailing economy

With economic growth grinding to a near halt, unemployment approaching close to 10 percent, and the inability to uphold the eurozone’s budget deficit limit of three percent, the conservative opposition has referred to the SPD-Green coalition plans as "poison" for the ailing economy.

Angela Merkel, head of the Christian Democratic Union, accused the government of damaging the economy. "We will not allow any tax hikes," she vowed after a meeting of her party’s leaders, saying that such plans would harm industry and be detrimental to economic growth.

Michael Rogowski, head of the Federation of German Industry, echoed Merkel’s concerns in an interview with the Berliner Zeitung. If the government continues with its "package of open and hidden tax increases," as presented in the coalition agreement, "the last remaining impulses for growth will be snuffed out."

In retaliation to such criticism, Schröder lashed out at the CDU and their "minions in the interest groups," calling their "string of lies" pure "social demagoguery." Both his party and the junior coalition partner, the Greens, are resoundingly in favor of the government’s plans.

On Tuesday Schröder will be reinstated in the Bundestag as the country’s chancellor.

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