Business leaders and economic experts yesterday condemned Germany's new government of Social Democrats (SPD) and Greens, claiming that the coalition's tax plans would do nothing to combat unemployment. The country's leading economic institutes warned that the incoming Chancellor, Mr Gerhard Schroder, may have to rethink his spending plans in the light of an unexpected DM10 billion gap in public finances.
The coalition partners signed a programme for government on Tuesday which identifies the fight against unemployment as the top priority and promises tax cuts for middle- and low-income families. But business representatives say their tax burden will increase and new energy taxes will be bad for business.
"The government policy agreed by the coalition partners for the next four years stands for economic stability, social justice, ecological modernisation, a depend able foreign policy, internal security, the strengthening of civil rights and equal rights for women," according to the programme for government.
The agreement bears the stamp of Mr Oskar Lafontaine, the SPD chairman who will be the new Finance Minister, and shows little trace of Mr Schroder's Blairite rhetoric about "the new centre".
Employers will be invited to take part in an "alliance for jobs" with trade unions and the government and every school-leaver will be guaranteed a training place. Thousands of Irish construction workers in Germany could fall victim to tougher measures against illegal, cheap labour which will make big companies legally responsible for the employment policies of sub-contractors.
The new government identifies the fight against unemployment as the key issue facing the European Union and pledges to support a European employment pact.
Mr Schroder has introduced a new, relaxed mood to Bonn, which has manifested itself in the friendly atmosphere of the coalition negotiations and in generous behaviour towards political opponents. Mr Schroder has praised his predecessor, Dr Helmut Kohl, and yesterday told the outgoing chancellor he could continue to live in his official Bonn residence for as long as he wished.
Up to three million foreigners living in Germany may become citizens under a new nationality law and the coalition is drafting an anti-discrimination law to protect minorities. Women occupy only one-third of cabinet posts in the new government but the position of women throughout the country will be improved by legislation obliging private firms to promote equal opportunities.
Girls will be entitled to half of all training places and a national campaign to combat violence against women will make it easier for women to prosecute their attackers.
The government will call off the war on drugs and introduce statecontrolled distribution of heroin to addicts, a policy that enjoys the support of most doctors and many police chiefs. A raft of environmental protection measures includes the negotiated closure of all of Germany's nuclear power stations and the inclusion in the country's constitution of a commitment to protect animals.
Reuters adds:
In Paris, a senior French official said yesterday that Mr Schroder has opted out of Armistice Day ceremonies commemorating the 80th anniversary of the end of the first World War, saying Germany should now turn to the future and not the past.
