Schröder Seeks Dialogue with Unions

The nearly 220 protests staged across the country on Monday marked the sixth in a series of weekly rallies against Schröder's plans to slash benefits to the long-term jobless. Staged just one day after the chancellor's Social Democrats suffered heavy losses in an election in the southwestern state of Saarland, the demonstrations were a strong reminder that the party's politics have not met with the widespread acceptance Schröder and his team of advisors had hoped.

Adding to the pressure, several critics from within the chancellor's own party, pushed for the reversal of the unpopular measures, which reduce long-term unemployment benefits to the level of social welfare payments. They claim the cuts -- part of the far-reaching package of social and economic reforms known as Agenda 2010 -- were responsible for the Social Democrat's (SPD) worst poll results in Saarland since 1960.

Responding to the inner-party opposition, Schröder said on Monday he "would have wished for a better result," but that there was no turning back. In a speech to labor leaders -- a group whose criticism has particularly hurt the traditional union friendly party -- he said he remains convinced that his program of social-welfare trims begun last year "is the right way."

"We need to recognize the necessity of reforms," he said Monday evening, repeating his stance that the overhaul of the traditional social welfare state is crucial to boosting Germany's economy, lowering the country's debt and fighting chronic unemployment.

Trade unions seek dialogue

In an attempt to improve the working relationship between the government and the unions, Schröder and SPD party leader Franz Müntefering have scheduled a meeting with leading labor leaders on Tuesday. According to information from the Berliner Zeitung, the talks will focus on hammering out common positions and improving the climate between the two groups, which in the past year have drifted apart over the government's reform plans.

Union leaders have in particular criticized the expectations the reforms place on the unemployed. Clauses in the government's new labor market program requiring those without a job to accept work below tariff wages or in fields outside of an applicant's area of expertise have been attacked as "unreasonable."

In the last several weeks, members of the unions have also joined forces with angry protestors calling for a repeal of the Harz IV cuts in unemployment benefits. But on Tuesday, the cuts in unemployment benefits will take a secondary position in the overall discussion on future labor market and economic reforms.

Speaking to German public broadcaster ARD, Franz-Joseph Möllenberg, head of the union for restaurants and gastronomy (NGG), said he was optimistic ahead of Tuesday's meeting. "I am certain that we will finally be able to give the country the social orientation it needs," he said while cautioning that this could only happen "when certain unreasonable hurdles are removed."

A reversal of opinion

Ahead of the meeting with Schröder, the head of the German Trade Union Federation (DGB), Michael Sommer, reversed an earlier position and called for closer cooperation with the SPD. Just two weeks ago he had recommended that the unions in his umbrella organization vote against the SPD in the next federal election in 2006. Frank Bsirske, head of the service union Verdi, also echoed the sentiment when he told members Schröder's reform policies had failed. The two now have signalled a greater willingness to discuss issues such as tariff contracts, minimum wage and tax breaks -- areas where they say the two groups can and should work together.

Schröder, too, has softened his criticism of the labor groups. When just a few weeks ago he criticized them for exaggerating the negative impact of the reforms and driving voters into the hands of opposition parties, he is now calling for the adoption of a common strategy.

Election at stake

The chancellor has staked his political future on Agenda 2010, which also includes reductions in health care, a revisal of job protection laws, changes in welfare payments and a tax cut. But with a marathon of state and local elections scheduled for the coming month, Schröder and the Social Democrats can ill afford to alienate the public even more.

Working together with the unions could be the first step to helping reinsure core voters that the SPD is listening to the public's concerns.