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Greens Back Plans to Aid German Economy

June 15, 2003

COTTBUS, Germany (AP) _ Chancellor Gerhard Schroeder’s plans to trim Germany’s welfare state and ease job market regulation got firm backing from his junior coalition partner Sunday, when the Greens said the proposals were vital to get Europe’s biggest economy ``back on its feet.″

Some 800 Greens delegates voted more than 9-to-1 in favor of Schroeder’s plan at a special conference in the eastern city of Cottbus. Schroeder’s Social Democrats already backed his course at their own meeting two weeks ago, despite concern that poorer Germans will bear too much of the burden.

``It’s about not losing sight of fairness and at same time tackling the structural reforms without which our country won’t get back on its feet economically,″ Greens co-chairman Reinhard Buetikofer said after the vote.

Germany is struggling to emerge from a third year of near-zero economic growth that has driven unemployment _ currently more than 10 percent _ to the highest levels since German reunification in 1990.

Schroeder, his popularity dented since his re-election last September, has staked his authority on a package of social reforms dubbed ‘Agenda 2010.’ Schroeder says the proposals will breathe new life into the economy and allow Germany’s generous welfare state to survive.

Business groups have long lobbied for an easing of rules that make it hard to fire workers _ a situation they say makes employers reluctant to hire in the first place. Cuts in jobless benefits and employer contributions to workers’ sick pay are supposed to ease the overall staff bill for companies.

Critics say the package will do little to boost growth and employment and are calling for tax increases on better-off Germans to bolster government finances.

Greens delegates backed an amendment Sunday calling for government policy to be ``socially balanced.″

The government, meanwhile, is weighing whether to bring forward tax cuts scheduled for 2005.

Schroeder must now pilot his plan through parliament later this year. His coalition has only a four-seat majority in the lower house and lacks one in the upper house, and it remains unclear whether a handful of government lawmakers opposed to his plans would defy him in a vote.

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