• Germany's news in English
 

Germany looks back at a decade of reform

Published: 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
Sudeten Germans give up 'right to homeland'
Sudeten Germans practising traditional dance at a gathering in 2014. Photo: DPA

Sudeten Germans give up 'right to homeland'

The Sudeten German Homeland Association has given up its claim to the group's former home in parts of the Czech Republic, quieting one of the final echoes of the Second World War. READ  

Minister draws fire over wage transparency plan
Families Minister Manuela Schwesig. Photo: DPA

Minister draws fire over wage transparency plan

Families Minister Manuela Schwesig confirmed on Sunday that she wants a new law allowing women to compare their wages with men doing similar work, provoking angry reactions from employers. READ  

Police wind down Bremen terror response
Heavily-armed police on patrol outside Bremen cathedral. Photo: DPA

Police wind down Bremen terror response

Police in Bremen said that the risk of a terrorist attack had been reduced in the city after they arrested two suspected arms dealers. The city remains under high alert, with special protection for the Jewish community. READ  

Germany's Schäuble softens Greece tone
Photo: DPA

Germany's Schäuble softens Greece tone

German Finance Minister Wolfgang Schäuble said Sunday Greece's new hard-left government needs "a bit of time" but is committed to implementing necessary reforms to resolve its debt crisis. READ  

UK Pegida rally dwarfed by counter-demo
Photo: DPA

UK Pegida rally dwarfed by counter-demo

An estimated 375 people turned out for the Germany-based PEGIDA movement's first demonstration in Britain on Saturday, but were outnumbered by a 2,000-strong crowd of counter-protesters, police said. READ  

Greek PM vows to 'start working hard' after vote
Photo: DPA

Greek PM vows to 'start working hard' after vote

Greek Prime Minister Alexis Tsipras vowed Friday to "start working hard" to implement vital reforms in the stricken eurozone country, after Germany's parliament approved a four month extension to its bailout. READ  

Ukraine: troop deaths 'serious breach' of truce
Photo: DPA

Ukraine: troop deaths 'serious breach' of truce

Ukrainian President Petro Poroshenko declared the killing of three government troops by pro Moscow rebels a "serious breach of the ceasefire", during a telephone call Friday with German Chancellor Angela Merkel, her office said. READ  

Man wins court battle over loud footsteps
Trouble at the top. Photo: DPA

Man wins court battle over loud footsteps

Germany's highest civil court ruled in favour of a man who swapped the carpet in his new apartment for parquet flooring, incurring the wrath of the retired couple who lived below him over his loud footsteps. READ  

Teachers to strike nationwide from Monday
Photo: DPA

Teachers to strike nationwide from Monday

Teachers all over the country are expected to stike starting Monday, German education trade union GEW said, after negotiations with the wage commission of the federal states (TdL) failed to achieve results. READ  

EU court deals blow to US Iraq objector's hopes
Andre Shepherd at the European Court of Justice in June 2014. Photo: DPA

EU court deals blow to US Iraq objector's hopes

American soldier Andre Shepherd, who applied for asylum in Germany as a conscientious objector against the war in Iraq after going AWOL from his unit, saw a judgement by the Court of Justice of the European Union (CJEU) go against him on Thursday. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Green party proposes first-ever cannabis legalization plan
National
Singapore canes Germans for train graffiti
Sponsored Article
Expert US tax preparation for Americans in Germany
Politics
Surprise! Germans love feeling like they run the EU
Sponsored Article
Tourist or lifer: what sort of expat are you?
Politics
Anger over plan to show women what men earn
Travel
Munich tram fans bicker over new bell
Features
Kafka: puzzling translators 100 years on
Business & Money
France or Germany: Which country really is the best country to work in?
Photo: Police
Rhineland
Student driver crashes tank into family garden.
Photo: DPA
Politics
There was a notable absence at the Anti-Semitism Commission
National
How Dresden bombing still divides Germany, 70 years on
Sponsored Article
Are you an American expat? How to face FATCA
Photo: DPA
Gallery
Take a cute break with this gallery of baby animals
International
What's keeping UK expats from voting?
Photo: DPA
National
Terror alert at a new high. Should you be worried?
Gallery
The best regional foods TTIP opponents want to protect
Photo: DPA
Features
All you ever needed to know about Pegida
Photo: Shutterstock
Culture
This cosplayer did not think his plan through
National
Europe in statistics - from Spain to Sweden
Gallery
Top 12 German idioms
Culture
10 top tips for partying in Germany
Photo: DPA
Technology
What does the Chancellor see as the future of the internet?
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
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

4,377
jobs available
Toytown Germany
Germany's English-speaking crowd