Berlin will be 'the centre of Europe'

CHANCELLOR GERHARD Schroder ushered in his "Republic of the New Centre" yesterday, pledging to modernise German society and cut unemployment in the coming four years of his reign.

But his "government declaration" itemising the programme of the Social Democrat-Green coalition, was immediately attacked by the opposition as lacking substance, and drew broad criticism for its paucity of vision. "We have said that we do not want to do everything differently, but many things better," Mr Schroder reminded parliament. Proving to be a man of his word, the Chancellor spoke for two hours about the minor improvements he had in mind.

He evoked the New Centre, a Schroderite variation on the Third Way theme, promising to liberate Germans' entrepreneurial spirit, thus creating the conditions for an economic renaissance. Taxpayers would be receiving DM15bn (pounds 5.3bn) back from the state by 2002, DM5bn more than originally envisaged.

Nevertheless, business continues to be unimpressed by the pro-business gestures of the new government. A new ecology tax has been roundly condemned by industry, and economists are unconvinced by promises of a cut in long- term unemployment.

The new administration hopes to rekindle the "alliance for jobs" plan first proposed by a trade union leader two years ago. The idea is for employers and employees to thrash out a deal, bringing down labour costs while arresting the trend of mass lay-offs.

The initiative will be launched before the end of the year.

The opposition had heard it all before, and wanted more specifics. "Showtime is over," shouted Wolfgang Schauble, the Christian Democrats' new leader succeeding Helmut Kohl. "What's needed now is substance."

But Mr Schroder has always been stronger on style, and refused to heed his opponent's advice. So he dwelt on the future instead, the new beginning represented by the move to Berlin. The New Centre, he assured Germans, would be perfectly at home in the former capital of the Reich.

"To some people, Berlin still sounds too Prussian, too authoritarian, too centralised," Mr Schroder said. "Our totally non-aggressive vision of a Republic of the New Centre stands as the exact opposite of this.

"Berlin symbolises the Republic of the New Centre as it lies at the heart of Germany and at the heart of Europe. Berlin also stands for ... an atmosphere of openness, which has made the city an attraction for youth and the cultural avant-garde from all of Europe."

The city is to receive extra funds for its cultural institutions, he promised, though there is no talk just yet of building a millennium dome in the new epicentre of Cool Germany.

Betraying his priorities, Mr Schroder devoted little time to his country's relationship with the outside world. He paid lip-service to the independence of the European Central Bank. In foreign affairs, he praised the importance of the transatlantic link and grumbled about Germany's contributions to the European Union budget, but gave few details.