Demonstrators carried banners reading: "Schröder must go," and demanding the creation of a new party of the left.
Rallies in Leipzig, Halle, Magdeburg, Rostock and Suhl will add pressure on Schröder to reverse his reforms in the face of record low opinion poll scores for his Social Democratic Party (SPD).
The reforms will particularly hurt regions of former East Germany where unemployment is as high as 17 to 20 percent. Eastern Germany has been plagued by high unemployment since national reunification in 1990 as unprofitable former state-run enterprises were closed down. In July, the jobless rate was at 18.5 percent, more than double the figure in the wealthier western states.
The reforms, part of Schröder's controversial Agenda 2010 package, would see benefits for the long-time unemployed slashed to the rate of subsistence-level welfare payments.
The two Germanies reunited in 1990 after communism collapsed in East Germany with the disintegration of the east bloc in the wake of reforms in the Soviet Union.
Monday demos an East German tradition
German protest organizers have called for regular "Monday demonstrations," recalling weekly demonstrations 15 years ago in East Germany against the dying communist regime. Marches in autumn 1989 drew hundreds of thousands in Leipzig, the epicenter of the pro-democracy movement under the communists, and helped set events in motion that led the Berlin Wall to fall that November.
Christian Führer, a pastor who helped organize the Leipzig rallies, said he would join the new protests and dismissed claims that the demonstrators were putting Schröder's government on a par with the communists' repressive regime. "You can't say, 'We're happy that you marched against the communists, but you should shut up now'," Führer told the Berlin radio station Inforadio. "That's totally unacceptable."
"The Monday demonstrations is a brand name," added Winfried Helbig from the Leipzig social forum. "The people also went out into the streets in 1989 because they could see no future for themselves."
"We want to remember 1989, when the people said: that's enough," said ATTAC, an anti-globalization group.
Germany's Federal Labor Agency said some one million people in the eastern states and 1.2 million in the more populous west would be affected by the reforms which also require those on the dole to dip deep into family savings and life insurance policies to support themselves.
Schröder, faced with yawning public deficits and stagnant economic growth, has moved to cut government outlays for pensions, health care and other social welfare benefits. But his plans have sparked waves of protest against the center-left government, with the SPD currently trailing the conservative opposition Christian Union parties by more than 20 percentage points.
The government's deputy spokesman, Hans Langguth, denounced Monday's demonstrations as "a higher level of hysteria." He accused the media of disinformation by emphasizing the sacrifices instead of the benefits of the reforms. Langguth called on demonstrators to make a clear difference in their minds between what was happening in East Germany in 1989 and what was now in play.
Economics Minister Wolfgang Clement, the man behind the controversial reforms said the comparison with 1989 was "an insult to the civic courage shown by many East Germans." The SPD accuses former communists -- currently enjoying a wave of new popularity, and the conservative opposition in Germany of fanning the flames of discontent.