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Germany

"We'll See on Election Night if Stoiber is a Wolf in Sheep's Clothing"

Chancellor Gerhard Schröder says voters will be making a mistake if they're won over by the conservative candidate's appeal to the centre, in a Handelsblatt interview.

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Striking a confident pose

Unemployment is the main issue preoccupying Chancellor Gerhard Schröder right now, and though he's far from satisfied with his government's record in this area, it can at least look back at some achievements. This emerges from an interview given by the Chancellor to Handelsblatt, in which he also explores Germany's relations with the European Union and his prospects for coming general elections.

"What preoccupies me the most is the unemployment figures and the question of how we can make further improvements on the jobs market," Schröder replied when asked about the series of problems that face him right now: the economy in the doldrums, the unemployment figures rising, Finance Minister Eichel facing the threat of a budget warning from Brussels and the conservative opposition in front in opinion polls.

"We still have 500,000 fewer unemployed people than we had in January 1998. I call that a success, even if it is in no way enough as far as I am concerned," the Chancellor continued. "We have tried to defeat unemployment on the primary labour market with the means we have at our disposal at national level. These include a rational tax policy on the supply side as well as on the demand side. Above all, we plan to stick to our path of budget consolidation, despite the occasional criticism from the opposition."

When he came to power in 1998, Schröder famously set the target of 3.5 million unemployed. With unemployment now just below 4.3 million in election year, he was asked whether he would set that target now if he had his time again. "That target was set within very precise framework conditions, i.e. a strong economic upswing had been forecast," he replied. "Knowing all that we now know, we can say that the target was unreachable. This is because of the global economic downturn and the events in the United States – factors whose effects cannot be offset with the use of means available to us at the level of national government."

Confronted with the charge that Germany's record on employment is the worst in Europe, the Chancellor went on the defensive. "It is simply not true that jobs have been lost in Germany," the Chancellor argued. "Since 1998, some 1.2 million jobs have been created in this country."

The meaning of ‘modernisation’

But many observers are perplexed as to why Schröder, with his reputation as a moderniser, does not heed the calls for deregulation of the labour market. "Let's talk about concrete matters here," he said when asked about this. "The complaint is always levelled at German regulations governing working hours that they are too inflexible. But you won't hear the complaint of a lack of flexibility coming from anyone who has taken a fair look at some of the many innovative work-time models that have been introduced, let alone anyone who has been able to take advantage of them."

Schröder does not agree that Germany's complicated laws on job protection are an obstacle to employment. "We enjoy a measure of job protection that creates a sensible balance between workers' need for security and companies' need for flexibility," he said. "Now one can be of the opinion held by many in the opposition that job protection should be dismantled. I don't share this opinion. The last government reduced job protection, but didn't manage to increase employment – quite the contrary. There's no empirical evidence to back up the thesis that the easier it is to get rid of workers, the easier it is to hire them."

In this respect, the Chancellor is not convinced by the example of the United States. "You cannot translate American conditions to Germany. And the point of a social democratic government is to stop German workers from being turned in to a mass that is at anyone's disposal."

Continued on page 2

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