GERMANY: Germany's embattled Chancellor, Mr Gerhard Schröder, is to meet conservative leaders in a last-ditch attempt to rescue the government's immigration legislation from political oblivion.
News of the intervention comes at the end of a disastrous week for Mr Schröder, dominated by a chaotic scramble to fill an €18 billion hole in next year's budget.
The immigration row has been running for three years since the government proposed ending Germany's decades-old closed door policy and to allow immigrants to live and work permanently in the country, based on the needs of the employment market.
However every attempt to pass the legislation has failed in the Bundesrat, the upper house representing the federal states where the opposition Christian Democrats (CDU) have a majority.
The Social Democrat (SPD)-Green coalition has already watered down several points of the original legislation in its attempt to please the CDU.
But its demands for tighter measures on terrorism prevention in the wake of the Madrid bombings were rejected by the Greens earlier this week.
Mr Franz Münterfering, leader of the SPD, said yesterday the government's priority was a "joint law" agreed with the opposition and warned against any "party political manoeuvring". Germany needs to admit at least 50,000 skilled immigrants each year to address labour shortages. Without immigration, the population will age dramatically in the next 50 years and shrink from the current 82 million to 60 million.
Despite the obvious need to open its borders for the first time since the arrival of so-called "gastarbeiter" from Turkey in the 60s and 70s, immigration is a charged topic here with unemployment over 10 per cent.
The high unemployment and negligible economic growth in the last three years have seen the popularity of the ruling SPD hit record lows of just over 20 per cent. The long-hoped-for economic upswing has yet to kick in, but time is running out for Mr Hans Eichel, the finance minister, who promised Brussels he would bring the budget deficit below three per cent of gross domestic product (GDP) by next year in line with eurozone rules.
That could all come to nothing if, as expected, he is faced with a budget deficit of almost €45 billion next week, some €18 billion more than planned.
Economic panic has split the government: the Greens favour spending their way out of the slump to boost consumer spending, regardless of the budget deficit while the Social Democrats are anxious to stick to the austerity measures.
The implementation of those measures, known as "Agenda 2010" has been a frustrating experience for voters. Health care reforms introduced in January caused widespread confusion and may yet be reversed.
Yesterday the Bundestag passed a well-intentioned law to fine companies who fail to take on young apprentices. However the law became the laughing stock of the country when it emerged that the law would apply to all businesses, even bordellos.
Meanwhile, every day brings new ideas and mixed messages about how best to end Germany's economic slump and replenish its coffers. On Tuesday Mr Wolfgang Clement, the economics minister, surprised everyone, including Mr Schröder, with plans to raise €2.5 billion by abolishing tax relief on savings account interest.
A day later, after tense talks with Mr Schröder, he changed his mind, increasing voter suspicions that, in Berlin, it's every man for himself. "We're dancing on the Titanic," said one SPD politician.