• Germany edition
 
Germany looks back at a decade of reform
Photo: DPA

Germany looks back at a decade of reform

Published: 14 Mar 2013 15:22 GMT+01:00
Updated: 14 Mar 2013 15:22 GMT+01:00

Schröder sketched out his reforms to lawmakers on March 14th, 2003, proposing swingeing cuts to unemployment benefits in an attempt to cure the country The Economist magazine had dubbed "the sick man of Europe."

"Overhauling and renewing the welfare state has become unavoidable," Schröder told parliament at the time. "It's not about killing it off, rather solely retaining the substance of the welfare state. Therefore we need fundamental change."

In adopting the initiative which among other things targeted the long-term unemployed, Schroeder's centre-left Social Democratic Party (SPD) "abdicated the (party's) core competence of social justice", political scientist Jens Walther, of Düsseldorf University, told news agency AFP.

This drew the wrath of a section of his party, as well as its traditional allies, the trade unions – 130,000 members left the party between 2003 and 2008 and the SPD's performance in elections weakened. The unreformed socialist party The Left, also prospered from dissatisfaction with the SPD.

Yet ten years later Europe's top economy is one of the continent's most prosperous. Its jobless rate of 6.8 percent last year made it the envy of its neighbours, while most economists and even the centre-right have acknowledged that Agenda 2010 reforms have played a part in this success.

"I don't contest the role played by Agenda 2010 for growth," Rainer Brüderle, the main candidate for the pro-business Free Democratic Party (FDP) in September's federal elections, said last week. But, he added ironically: "Today, the SPD wants nothing more to do with the Agenda."

While Walther said he would not go that far, he said there existed "this contradiction" within the party, which in an election year complicates things for the SPD's candidate to replace Chancellor Angela Merkel, Peer Steinbrück.

On the one hand the party feels great pride for having initiated the reforms which have borne fruit. Without them "we would be alongside Italy, France or Spain, facing clearly bigger problems", the leader of the SPD's parliamentary group Frank-Walter Steinmeier, said on Monday.

But on the other hand there remains a lingering feeling of having betrayed the traditional party faithful. "They say they ended a downward spiral [for Germany's economy] but for many it was just beginning," former trade unionist Wolfgang Denia, an SPD party member, said, denouncing Schröder's reforms for having hit party voters from the working and middle classes.

Under Agenda 2010, long-term unemployment benefits were rolled together with welfare under the now-hated Hartz IV system which sets out in detail what a recipient is allowed to have and spend their money on. The jobless are also forced to take work that is offered to them or risk seeing their benefits cut, while low salaries have become more commonplace with around one worker out of 10 toiling for less than €8.50 ($11.06) an hour.

A poll released this week by Stern magazine showed Germans deeply divided over the legacy of Schröder's Agenda 2010. While 44 percent said the reforms had been good for the country, 43 percent believed that Hartz IV in particular had had a negative effect.

An electoral drubbing in 2009, when the SPD garnered less than a quarter of the votes, led to the party re-examining some of its policies, and today it acknowledges that the reforms had certain harmful effects and plans to remedy them.

Unveiling its manifesto for the September 22 elections under the title 'For A New Social Balance In Our Country', the SPD did not touch on the principles of its 2003 reforms but said it wanted to regulate temporary work, introduce a minimum wage and increases taxes for the wealthiest.

"We've reviewed everything," Cansel Kiziltepe, an SPD candidate in a Berlin constituency for the elections, told AFP. "But the problem of credibility is still there. As long as we don't say clearly 'it was a mistake', we will not be credible," she said.

The SPD currently is polling at around 26 percent, according to a recent survey compared to 40 percent for Merkel's conservatives.

Schröder, visiting the SPD parliamentary group this week for the first time since leaving office, said he could understand the need to temper some of the effects of his reforms.

"If the basic principles of the Agenda – to support and demand more from people – remain intact, I'd be the last one to have something against that," he said, adding that his legacy should not be confused with the Ten Commandments.

AFP/The Local/DAPD/mry

The Local (news@thelocal.de)

Your comments about this article

18:24 March 14, 2013 by RajeshG
I think he was a wolf in sheep's clothes. He did everything pretending it is good for the nation, where as it was good for the business and not the general public and then he became - the chairman of the board of Nord Stream AG, after having been hired as a global manager by investment bank Rothschild - nice cushy job hmmmm paying him millions and not certainly 8 euros per hour
21:22 March 14, 2013 by Englishted
Todays how wonderful it is in German and how thankful we should be story ,force fed "good" stories until we believe and don't question.
22:15 March 14, 2013 by pepsionice
Only to point this out....but the state-run TV news media spent several years blasting away at this change as a very negative thing. They would always show poverty and how Germans were suffering from the change. I can still remember from the World Cup games....having people walking around to pick up beer bottles and how the media noted this constantly on the evening news....as their only way to get ahead for that month.
00:15 March 15, 2013 by neunElf
Yes Herr Schröder is quite the "limousine leftist".

Fits in very well with his comrade, Putin.

Quite a troubling photo for a Bundeskanzler, n'est­ce pas?
Today's headlines
Expats reveal another side of Berlin Wall
Photo: Paul Sullivan

Expats reveal another side of Berlin Wall

Two expats who walked the Mauerweg - the 160-kilometre trail that runs the length of the former Berlin Wall - have written a book about forgotten aspects of its past and present. READ  

Karstadt closes six stores to stay afloat
Photo: DPA

Karstadt closes six stores to stay afloat

Germany's biggest department store chain Karstadt will close at least six stores, putting around 2,000 jobs at risk, in a drastic bid by its new boss to return it to profit. READ  

Quiz
How well do you know Germany?
Photos: DPA/Shutterstock

How well do you know Germany?

Do you know your Saxony facts from your Saxony-Anhalt ones? Test your knowledge of Germany's federal states in The Local's quiz. READ  

Climate chief hails Bonn greenhouse gas deal
Pollution from a coal-fired power station in Frimmersdorf, North Rhine-Westphalia. Photo: DPA

Climate chief hails Bonn greenhouse gas deal

The UN's climate chief hailed a European agreement in Bonn on greenhouse gases on Friday as providing "valuable momentum" for a world pact to be inked in Paris next year. READ  

Germany gets €780m EU rebate for poor growth
Photo: DPA

Germany gets €780m EU rebate for poor growth

Germany will get an early Christmas present of around €779 million from the EU, thanks to weaker than expected GDP growth. READ  

Stay inside after blast, Ludwigshafen told
Photo: DPA

Stay inside after blast, Ludwigshafen told

It will take several days to find out what caused a massive explosion on Thursday which rocked a town on the Rhine, killing a builder and injuring 26 others. READ  

German helicopter fleet 'not fit for Nato'
An NH90 helicopter. Photo: DPA

German helicopter fleet 'not fit for Nato'

Germany's fleet of NH90 helicopters is undergoing engineering checks after one of them suffered a serious engine failure, in the latest blow to the country's military capabilities. READ  

Ex-boss of Berlin Airport farce gets €1.2m
Rainer Schwarz at a court hearing in September into the case. Photo: DPA

Ex-boss of Berlin Airport farce gets €1.2m

The man who was blamed for Berlin's miserable attempt to build a new airport must be paid more than €1 million - after being fired. READ  

Steinmeier challenges UN over Isis gas reports
Foreign Minister Frank-Walter Steinmeier and Kurds watching the attack on Kobane. Photo: DPA

Steinmeier challenges UN over Isis gas reports

Foreign Minister Frank-Walter Steinmeier pressed UN General Secretary Ban Ki-Moon to bring possible poison gas use by Isis in Iraq before the Security Council. READ  

Spring back in German consumers' step?
Photo: DPA

Spring back in German consumers' step?

Update: Consumer confidence in Germany has stopped falling, as households appear to be no longer fazed by concerns about the economic fallout from geopolitical crises, a new poll found on Friday. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: DPA
Politics
Satirist lives the dream on EU gravy train
Photo: DPA
Gallery
PHOTOS: Huge explosion rocks Ludwigshafen
Photo: DPA/Shutterstock
Gallery
Which high school cliche is your German city?
Photo: DPA
Gallery
Storm hits southern Germany
Sponsored Article
An international school unlike any other : School on the Rhine
Photo: Fitzpatrick family
Society
'We still don't know what happened to Matthew'
Photo: Mariana Schroeder
Munich
Special Report: Hope and chaos at Munich's refugee shelters
Photo: DPA
Culture
Can you top our history quiz leaderboard?
Photo: DPA/Shutterstock
Gallery
11 things Germans are afraid of...
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Sponsored Article
Bilingual education from nursery to graduation at Phorms
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,528
jobs available
Toytown Germany
Germany's English-speaking crowd