Bonn eases back on eastern austerity plan

THE German opposition and trade unions yesterday united in condemnation of the 'solidarity pact' - in effect, an austerity package on behalf of eastern Germany - which has been proposed, after long deliberations, by leaders of the government coalition parties in Bonn.

The coalition's parliamentary groupings - the Christian Democrats (CDU-CSU) and the Free Democrats (FDP) - met yesterday evening to discuss the package which the party leadership presented for MPs' approval.

Even within the government parties there was little enthusiasm for the new proposals. The document proposes a variety of cuts in social spending and tax increases, in order to help finance the recovery of the east. Especially sensitive were proposals that child benefit and other family benefits should be means-tested and reduced.

But last night sources said the Bonn coalition, bowing to pressure from its own ranks, had dropped or modified the changes in child benefits. Plans to cut grants for parents who give up work to raise their children, usually paid up to three years after birth, were also not as severe as initially envisaged.

Unemployment benefit is also to be reduced under the austerity plan as Bonn seeks to save 18bn marks ( pounds 7bn) through the proposals. A 'solidarity surcharge' tax is to be introduced from 1995. Given the early promises of Chancellor Helmut Kohl that unity would be financially painless, such changes are proving difficult to sell to the electorate. Ulf Fink, chairman of the CDU social affairs committee, complained that the solidarity pact proposals failed to share the burden of sacrifice equally, as had been promised. Bernhard Vogel, the CDU prime minister of Thuringia, in eastern Germany, complained that the expected help for the east was 'not enough'.

Leading members of the opposition Social Democrats (SPD), whose support for the Solidarpakt the government will be seeking, were scathing in their rejection of the proposals. The SPD prime minister of the Saarland, Oskar Lafontaine, complained that the proposals showed a 'complete lack of conscience'. Peter Struck, one of the leaders of the SPD parliamentary grouping, described the proposals as a disgrace. Trade union leaders complained that the new package had 'little to do with solidarity' and would affect the 'poorest of the poor'.

Few in the west are ready to make sacrifices; in eastern Germany, however, where many people have come to feel that they are second-class citizens, there is a growing resentment that the west is not prepared to share the relative prosperity that it continues to enjoy. As a set of questionnaires in this week's Spiegel magazine clearly emphasises, there is a widespread belief that 'the new Wall is growing'.

On a wide range of issues, perceptions in west and east are radically different. Two- thirds of east Germans think those in the west have 'not learnt to share' (less than half of west Germans agree).