GERMANY: A tearful but defiant Chancellor Gerhard Schröder stood down as chairman of the Social Democratic Party (SPD) in Berlin yesterday, warning left-wingers not to endanger crucial reforms by forming a new splinter party.
Mr Schröder admitted that after a "bloody difficult" five years as SPD chairman, it was time for a new leader, allowing his close ally, Mr Franz Münterfering, to be elected with 95 per cent support.
His emotional farewell speech came almost a year to the day after he confidently unveiled a package of reforms called "Agenda 2010" he promised would cure the country's economic ills. A year on, however, the reforms have been blocked and stalled by Germany's powerful interest groups and the opposition majority in the upper house, the Bundesrat.
Mr Schröder remains convinced the reforms are right but the message was wrong, partly because he tried to juggle the two full-time jobs of SPD leader and Chancellor, thus his resignation yesterday.
His successor, Mr Franz Münterfering, the new SPD leader, enjoys much greater popularity than the Chancellor among party rank and file, but he inherits a party in disarray.
Support has slumped to historic lows of 29 per cent, the long-heralded economic recovery remains firmly fixed on the horizon and unemployment refuses to drop below 4 million. Without an economic upswing, Mr Münterfering will find it difficult to counter growing criticisms that the reforms hit the weakest in society.