German business praisesSchroeder's reform course

28th October 2004, Comments 0 comments

28 October 2004 , BERLIN - After a long period of tension, relations between Chancellor Gerhard Schroeder and Germany's powerful business leaders appear to be have undergone something of a renaissance. Once known as the Genosse der Bosse (the comrade of the bosses), Schroeder's ties to corporate Germany slumped in recent years as his Social Democrat-led government battled to forge ahead with a rigorous economic reform agenda and the nation's economy struggled to emerge from a protracted period of stagnatio

28 October 2004 

BERLIN - After a long period of tension, relations between Chancellor Gerhard Schroeder and Germany's powerful business leaders appear to be have undergone something of a renaissance.

Once known as the Genosse der Bosse (the comrade of the bosses), Schroeder's ties to corporate Germany slumped in recent years as his Social Democrat-led government battled to forge ahead with a rigorous economic reform agenda and the nation's economy struggled to emerge from a protracted period of stagnation.

But with the conservative-led opposition having stumbled into a political crisis, the Chancellor has suddenly discovered business praising his firm stand against opponents of his reform plans which include cut welfare benefits, force the unemployed to take jobs and liberalise Germany's strict hire-and-fire laws.

An opinion poll published this week of the country's ruling business and political elite found that 85 percent of those responding believed that Schroeder was on the Comeback trail after support for the Social Democrats slumped to record lows.

Three months ago, only 35 percent of those responding to the poll, which was conducted by Allensbach group and published Wednesday in "Capital" magazine, believed the Chancellor would successfully emerge from the slide in his electoral support.

Earlier this month more than 60 of Germany's industry leaders including DaimlerChrysler AG chief Juergen Schrempp, Lufthansa AG boss Juergen Weber, the head of the luxury carmaker Porsche AG, Wendelin Wiedeking, TU travel chief Michael Frenzel and Gunter Thielen, the chief of the giant media group, Bertelsmann AG, signed a newspaper advertisement endorsing Schroeder's reform course.

"Who makes courageous changes which must be changed have us on their side," declared the business leaders' advertisement. "Therefore we support Chancellor Gerhard Schroeder in a grand coalition of common sense."

The batch of Schroeder reforms has also helped Germany's employers to press on with a round of far-reaching changes to the nation's industrial landscape, including extending working hours and shifting jobs out of the country to low-cost high-skilled nations in Central Europe and Asia.

Business support for Schroeder also coincides with a thaw in the previously frosty relations between Schroeder and his party's traditional allies, the trade unions, with talk in Berlin about moves to resurrect the Chancellor's so-called alliance for jobs, a union- business-government forum aimed at job creation.

The alliance for jobs collapsed before the last election in September 2002 as a result of deep divisions between the unions and the employers.

But high unemployment and a union call for a joint effort by business, union and government to shore up German as a place to investment, has raised the prospect of the alliance for jobs could look forward to a new lease of life.

Alarmed by the opposition's radical economic blueprint for Germany, which includes moves to wind back long-standing worker protection laws as well as big changes to the system of co- determination which gives worker representatives seats on company boardrooms, the unions have pulled back from their criticism of Schroeder's reforms and appear to have began returning to the Social Democrat fold.

Schroeder's new-found friendship with business and the reopening of lines of communications with the unions also comes as the Chancellor enjoys a rebound in his approval ratings which have propelled him back up towards the top of the list of Germany's most popular politicians.

Only a matter of weeks ago the Christian Democrat-led opposition were soaring in opinion polls as support for Social Democrats plummeted on the back of a weak economy and Schroeder's unpopular reforms.

Now with a moderate economic upswing taking shape, polls put Schroeder's Social Democrats and their Green Party coalition partners almost at a statistical dead heat with the opposition and within reach of retaining power in Germany's biggest state, North Rhine Westphalia in crucial elections set down for early next year.

Moreover, after initially warming to the Thatcherite-style reform agenda set out by the opposition under its leader Angela Merkel, German business has been forced to make a hasty retreat from the Christian Democrat camp and back to the government as the opposition has become embroiled in an internal battle over health reform and plans for Turkey's European Union membership.

The tensions in the opposition culminated in the dramatic resignation of the Christian Democrats' finance spokesman Friedrich Merz, who had strong business backing as a result of his unwavering commitment to reform.

DPA

Subject: German news
 

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