AMID growing divisions within the German government about economic policy, Chancellor Helmut Kohl bowed yesterday to opposition pressure to hold an emergency Bundestag debate on unemployment. Official forecasts predict that the number of Germans out of work, already over 4 million, will rise to 11 per cent of the workforce this year.
Dr Kohl will make a statement to the Bundestag tomorrow, defending his centre right government's strategy for creating jobs, including a proposed tax reform which has divided his own government. Further divisions emerged yesterday over a plan by the Labour Minister, Mr Norbert Bluem, to overhaul Germany's expensive old age pensions system.
The Liberal Free Democrats, the smallest party in the coalition government, published an alternative plan, complaining that Mr Bluem's proposals do not go far enough to reduce the burden pensions place on the government and employers. Mr Bluem was also criticised from within his own Christian Democratic Union with Saxony's prime minister Mr Kurt Biedenkopf accusing him of postponing the problem of financing pensions rather than solving it. "If it remains as it is, we will have squandered our last opportunity for a real reform," he said.
Dr Kohl chose to forgo an opportunity yesterday to invoke the spirit of Ludwig Erhard, the post war economics minister and chancellor who is credited with masterminding Germany's economic miracle. The chancellor had been due to speak at some length at a ceremony marking the centenary of Erhard's birth and a speech was already prepared.
Dr Kohl confined himself to praising Erhard's contribution to peace and prosperity in Germany and calling for a return to the basic principles of the social market.
Erhard introduced the Deutschmark in 1948 and helped to make it a symbol of economic success. He was the architect of Germany's social market system which cushioned the impact of free market capitalism with an efficient welfare state based on co operation between employers and unions.
The Social Democrat Party whip, Mr Franz Muentefering, said Dr Kohl's ministers had lost the right to associate themselves with Erhard's name, accusing them of betraying his legacy and of abandoning their social conscience.
"You are not fighting unemployment. You are proposing a tax system that is unfair: You make proposals about pensions that are socially unjust," he said.
