Schroeder Looks to Radical Jobs Scheme With Election in Balance

August 18, 2002 - 0:0
BERLIN -- German Chancellor Gerhard Schroeder, slumping in opinion polls and facing a flooding crisis, accepted the long-awaited proposals of a jobs commission Friday he hopes will deal him the trump card he needs before next month's national election.

While devastating floods gripped the economically depressed east of the country, Schroeder took time out to receive the recommendations on unemployment, one of Germany's most pressing problems and a source of ammunition for conservative challenger Edmund Stoiber, AFP reported.

The independent employment commission that scripted the proposals was chaired by Peter Hartz, personnel director at automaker Volkswagen and a Schroeder friend, and represents both labor and industry.

In its nearly six months of work, the body compiled a program of innovative measures aimed at getting half of the four million German jobless back to work by 2005.

"We have reached the conclusion that we can cut unemployment by half in three years, beginning today," Hartz said at a joint news conference with Schroeder.

Schroeder, who is reckoning with devastating floods that have killed 15 and are likely to cause billions of euros in damage, said he aimed to implement as many of the proposals as possible before the September 22 election.

This would potentially make the scheme the last major reform package of his center-left government.

Hartz handed Schroeder a CD-ROM with the proposals, which aim to slash the red tape linked to job placement schemes and encourage the unemployed to take available positions, including part-time and temporary jobs.

Stoiber has dismissed the Hartz commission report as a publicity stunt timed to make a splash just five weeks before the election.

His conservative Christian Union alliance has blamed the government for failing to get the economy moving again after a recession, saying that only strong economic growth can drive down unemployment.

Employers' Association President Dieter Hundt complained Friday that what began as a courageous initiative when the first details emerged in June had become "increasingly diluted" and now failed to go far enough.

He lamented the fact that initial recommendations to firmly cap unemployment benefits after a grace period were torpedoed by unions and some members of Schroeder's Social Democrats over the summer and eliminated from the final report.

"German industry and the unemployed expect more substance from politicians" when it comes to joblessness, agreed the Head of the German Industry Federation, Michael Rogowski.

The proposals are nevertheless viewed as radical in Germany, notorious for its bloated bureaucracy and reluctance to reform.

GLbeled a "carrot-and-stick" approach, the measures would nudge those out of work to take available jobs using incentives and punishing those who fail to immediately register with job placement centers with delayed benefits.

Younger and childless applicants would also face pressure to move to a new region if a job could be found for them there.

In addition, the giant Federal Labor Office, which got into trouble earlier this year for systematically misreported unemployment statistics, would serve as an temporary employment agency for the jobless and some welfare recipients.

Job seekers with few qualifications and the long-term unemployed could even be "loaned" to companies in the hope they would eventually be taken on.

The scheme also aims to make it easier for those out of work or working off the books to become independent contractors at a flat tax rate of 10 percent.