Farreaching German reform passes final hurdle

9th July 2004, Comments 0 comments

9 July 2004 , BERLIN - Germany's upper chamber of parliament, the Bundesrat, Friday approved the latest in a series of steps to reform the country's social system, a bill to revamp the state's costly system of unemployment and welfare support to the country's jobless. The bill, the result of more than two years of wrangling and give-and-take between the Social Democrat-Greens government and the opposition Christian Democrats, at its core merges two support systems - unemployment pay and social welfare - un

9 July 2004

BERLIN - Germany's upper chamber of parliament, the Bundesrat, Friday approved the latest in a series of steps to reform the country's social system, a bill to revamp the state's costly system of unemployment and welfare support to the country's jobless.

The bill, the result of more than two years of wrangling and give-and-take between the Social Democrat-Greens government and the opposition Christian Democrats, at its core merges two support systems - unemployment pay and social welfare - under one roof.

The legislation, dubbed "Hartz IV" - after Volkswagen labour market expert Peter Hartz who was called on to work to revamp Germany's complicated job rules - has been harshly criticised on the left as a step towards cutting the support for the needy.

In the Bundesrat, which represents the 16 federal states, the five eastern German states, including those from the SPD side, voted against the legislation.

But the bill was carried on the votes of the western German states as the SPD and the opposition Christian Democrats/Christian Social Union closed ranks.

Under the legislation, 69 cities and local community governments will in effect help perform the duties now assigned to the Federal Labour Agency in seeking jobs for the unemployed, in particular the long-term jobless, while also administering welfare support.

A controversial part of the legislation provides for cutbacks in the support paid to those unemployed persons who refuse to accept jobs which have been found for them, preferring instead to remain on the government unemployment support dole.

The new legislation takes effect on 1 January, 2005 and will change the way state support is provided to the some 3.1 million long-term unemployed and welfare recipients.

Hartz-IV is another example of Germany's consensus-style politics, political analysts note. The bill represents a compromise between those who backed more radical cuts in the country's generous but costly system of jobless and welfare benefits, and those who argued that the reforms would hurt those people already on the bottom.

But the legislation represents the latest action to revamp Germany's social system under the "Agenda 2010" reform agenda of the Berlin government. It comes amid stubbornly high unemployment of over 10 per cent, the cost of which has kept the Berlin government's finances deeply in the red the past several years.

DPA

Subject: German news

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