GERMANY: German politicians finally agreed the most drastic social welfare cuts in 50 years yesterday as well as radical new immigration laws following a four-year political stand-off.
Yesterday's double breakthrough marks a boost for the reform plans of the Chancellor, Mr Gerhard Schröder.
However, the concessions to win the support of the conservative majority in the upper house, the Bundesrat, have come at a high price.
Polls yesterday showed support for Mr Schröder's Social Democrats (SPD) has fallen to an all-time low of just 20 per cent as traditional left-wing voters continue to desert the party in droves.
From January 1st, dole payments in Germany will be cut to the level of social welfare - €345 a month in western states and €331 in the east - with additional allowances for housing and parents.
The payments will last two years, will be carefully means- tested, and can be withheld if job seekers refuse job offers, measures insisted on by opposition conservatives.
Mr Schröder admitted the welfare cuts were the "biggest and consequently also the most difficult social reform in the history of the federal republic" but said Germany faced little choice.
Germany's Interior Minister, Mr Otto Schily, said the immigration legislation that passed the upper house yesterday after four years of political wrangling marked a "historic break" and a departure from "the illusion that \ is not an immigration country".
The new legislation makes it easier for skilled foreign workers to move to Germany and loosens refugee protection.
Immigrants will, however, be obliged to attend integration and language courses paid for by the government.
The legislation is essential to avoid a demographic time bomb: Germany's projected population in 2050 will be 68.5 million, down from 82 million today, unless greater numbers of foreigners move here.
However, net immigration to Germany dropped by a quarter in the last four years to just 141,000 last year.