A victory that could restore Germany's economic health

Share

Germany has entered a new era. From this week, the country's generous unemployment benefits have been reduced and the rules for claiming them have been tightened.

Germany has entered a new era. From this week, the country's generous unemployment benefits have been reduced and the rules for claiming them have been tightened.

The reforms may seem timid compared with those introduced by Margaret Thatcher in Britain. For Germans, though, this was the first major pruning of benefits since their welfare state was set up after the war, and widespread protests had been forecast. That there was nothing like the explosion of anger that accompanied the passage of the legislation last summer reflected some judicious government concessions and a shift in public opinion.

With families largely protected - some will actually be better off - those with most to lose are the single unemployed and those with spouses in work. Many could now face a choice between moving to find a job, undertaking a long commute or accepting a job which is beneath their qualifications. To their credit, however, German voters apparently accept that this price could be worth paying if the result is lower unemployment, higher growth and a more competitive economy - a combination that would end Germany's decade as the sick economy of Europe.

Probably only a government formally of the left, such as Gerhard Schröder's red-green coalition, would have been able to enact such legislation. The popular outcry, had the political right tried something similar, can only be imagined. Nor should Mr Schröder's personal role be underestimated. A master tactician and something of a political gambler, he staked his chancellorship on his conviction that the reforms were essential to Germany's future economic health. His reward has been a steady rise in his ratings and disarray among his adversaries on the right.

There are risks ahead. Without new and well-judged investment, there is a danger that discontent could erupt in the eastern part of the country where jobs are scarce. And if there is no improvement in Germany's economic fortunes within the year, the whole rationale for the reforms could be called into question. For now, however, Mr Schröder can claim a famous victory, and the strong likelihood is that there will be no retreat.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

SThree: Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Recruitment Genius: Chief Engineer

£50000 - £55000 per annum: Recruitment Genius: A Chief Engineer is required to...

Recruitment Genius: Web Marketing Specialist

Negotiable: Recruitment Genius: One of the UK's leading Renewable Energy compa...

Ashdown Group: Data Warehouse & Business Intelligence Co-ordinator

£35000 per annum: Ashdown Group: Required skills include SQL querying, SSRS, u...

Day In a Page

Read Next
 

i Editor's Letter: The demise of a Sixties monster

Oliver Duff Oliver Duff
A CCTV camera is seen in front of a large poster opposite in central London  

Home Office is creating more powers to turn everyone into suspects – but leave us no safer

Shami Chakrabarti
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?