%mlink(STRY:; PHOTO:; AUDIO:%)

BERLIN (AP) _ Germany's Cabinet on Wednesday endorsed plans for changes in the country's labor market that aim to halve the number of people without a job, pledging to move ahead even before Sept. 22 elections in which the center-left administration faces an uphill struggle.

``We have fired the starting shot for implementing the proposals'' of a government-appointed panel that reported last week, Chancellor Gerhard Schroeder said. ``We will take the first steps immediately.''

Germany's sagging economy and stubbornly high unemployment _ currently running at a rate of nearly 10 percent, with more than 4 million people out of work _ have sapped the popularity of Schroeder's government, which has had to back off a pledge to reduce unemployment to 3.5 million by election day.

The 15-member commission, headed by Volkswagen executive Peter Hartz, proposes turning job-placement offices into fast-moving temporary staffing agencies, while putting more pressure on people to fill available positions and reducing red tape for the self-employed.

Also included is a recommendation for special bonds to drum up billions of dollars for investment mainly in the depressed former communist east of the country, where unemployment is almost double the national average. Hartz says the package could trim 2 million from the jobless total by 2005.

Labor Minister Walter Riester said he would start work on improving service at the country's labor offices immediately while the government prepares legislation to implement the main proposals, which it hopes could take effect at the beginning of next year.

Critics in the opposition and business groups have questioned why the government didn't react sooner to long-standing industry demands for a shake-up of the job market, where it is hard for companies to fire workers.

Labor unions fended off across-the-board cuts in jobless benefits during the drafting of the report. Instead, benefits would be reduced for people who refuse to fill open positions.