Merkel defends reforms, offers no new policies

24th May 2006, Comments 0 comments

24 May 2006, BERLIN - Chancellor Angela Merkel defended her government's reforms to an audience of mainly hostile trade unionists on Wednesday but did not make any new proposals to revamp Germany's still weak economy.

24 May 2006

BERLIN - Chancellor Angela Merkel defended her government's reforms to an audience of mainly hostile trade unionists on Wednesday but did not make any new proposals to revamp Germany's still weak economy.

"There is no way to get around structural changes," said Merkel to boos and whistles of members of the German Federation of Trade Unions (DGB) meeting in the Berlin.

Merkel admitted that economic and labour reforms would be difficult in the early stages.

But she underlined that without moves to kick-start the economy - which is just coming out of five years of stagnation - "the end will be bitter."

Merkel repeated calls for more flexibility of German wage agreements instead of the traditional blanket deals which have long been applied to entire sector.

While saying she was "open" on the idea of a minimum wage, Merkel rejected trade union calls for a national minimum wage of 7.50 euros (9.65 dollars) an hour.

"The key is what will create more jobs," she said to jeers.

While suggesting that Germany's "Mitbestimmung" (co-determination) system under which workers have a role in steering bigger firms needed to be adjusted to take account of the EU single market, the chancellor made no concrete proposals.

She also did not make any new suggestions on revamping Germany's rigid labour markets which business says is a main cause of the country's staggering 11.5 per cent unemployment rate.

Germany industry and private economists have expressed disappointment over the failure so far of Merkel's government to press on with much-need reforms to the country's fragile labour market.

Merkel was elected last year at the head of grand coalition government of her Christian Democratic alliance (CDU/CSU) the Social Democrats (SPD).

There has been growing conservative criticism in past weeks that Merkel's CDU/CSU is accepting too many SPD policies in order to keep the grand coalition stable.

DPA

Subject: German News

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