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German jobs supremounder pressure

Published on 23/01/2004

23 January 2004

BERLIN – A final decision on the fate of Chancellor Gerhard Schroeder’s jobs creation chief will be made after talks this weekend on a scandal involving awarding of contracts, the German government said Friday.

Florian Gerster, who heads the huge Federal Labour Agency, has been accused of handing out management consultancy contracts without adhering to normal public sector bidding procedures.

The weekly news magazine Focus reported that Gerster’s agency, which has a budget of EUR 57 billion for 2004, signed a further six contracts without going through regular tendering procedures.

So far the German government has backed Gerster, but with Schroeder wrapping up a week-long tour of Africa officials in Berlin have been on hold until the Chancellor returns.

Nevertheless, a senior member of Schroeder’s Social Democratic Party (SPD), Labour Minister Harald Schartau of North Rhine-Westphalia state, said Gerster was finished.

Gerster has lost the trust of the public and his own staff, said Schartau in a Deutschlandfunk radio interview.

Schroeder’s deputy spokesman, Thomas Steg, denied that a final decision had been made on Gerster.

"I don’t know what information Herr Gerster has access to … this is speculation," said Steg, adding that the Labour Agency’s board of directors would make a final assessment of Gerster’s contracts on Saturday.

"And then we will make our decision," added Steg.

Dumping Gerster would be an embarrassing setback for Schroeder who has made fighting unemployment his top domestic policy.

Gerster’s predecessor, Bernhard Jagoda, was forced to resign in 2002 after the government’s oversight watchdog found the agency had given false data on the number of people it claimed to have found jobs for. There were also allegations the mammoth bureaucracy was wasting money.

Meanwhile, German unemployment is stuck at 10.4 percent with some 4.3 million people jobless.