Alexa
  • Directory of Taiwan

Amid warnings of reform fatigue, Merkel says Germany must push forward with change

Amid warnings of reform fatigue, Merkel says Germany must push forward with change

Chancellor Angela Merkel said Friday that Germany must press forward with economic reform to remain competitive, a message which contrasted with her coalition partner's warning that Germans' capacity for reform could soon be exhausted.
The conservative Merkel leads a "grand coalition" with the center-left Social Democrats. The alliance has an overwhelming parliamentary majority, but limited common ground on how to modernize Europe's biggest economy and its expensive welfare state.
"To be able to survive amid worldwide competition, we must push ahead with structural reforms," Merkel wrote in an article for the daily Handelsblatt. "Work on the necessary reform projects in Germany will continue undiminished over the next year."
The German economy has recovered in 2006 after years of stagnation, helping push unemployment down to a four-year low of 9.6 percent.
"Despite the successes that have been accomplished, the biggest stretch of the road still lies ahead of us," Merkel wrote.
As opposition leader, Merkel advocated far-reaching economic reform during last year's election campaign. However, that cost her votes, and she was forced into a less ambitious "grand coalition" with her rivals, predecessor Gerhard Schroeder's Social Democrats.
The chancellor's comments came after the Social Democrats' chairman, Kurt Beck, warned this week of a danger of reform fatigue.
"What is necessary must be done, but we also must see that there are limits to (people's) capacity," Beck was quoted as telling the daily Die Welt. "I can only advise that these limits not be exceeded ... people must be able to digest and come to terms with what changes are necessary."
"Once what we have set in motion is implemented, the limit of reasonableness will be reached," Beck added.
The alliance has agreed to gradually raise the retirement age to 67 from 65 and embarked on a much-criticized reform of the public health insurance system; it is cutting and simplifying corporate taxes and plans limited labor market reform. However, it appears unlikely to agree on much deeper change.
Implementing what has been agreed also has been hard work. The health reform plan still requires parliamentary approval, and it has hit turbulence inside Merkel's coalition.
The reform is meant to ease the burden on employers from spiraling health costs and make the health system more competitive.
Many critics charge it will miss those aims. The Bavaria-only Christian Social Union _ part of Merkel's conservative bloc _ has threatened not to support it, citing concerns over the costs to Bavaria and the implications for private health insurance.
Merkel defended the plan in Friday's article, arguing that "health costs will gradually be uncoupled from labor costs."
Over recent months, poll ratings for both Merkel's conservatives and Beck's party have languished around or below their disappointing scores in the 2005 election.
Both have tried to balance their alliance with maintaining distinct public profiles.
The Social Democrats face a challenge to win back traditional left-wing supporters angered by Schroeder's efforts to trim the welfare state, while Merkel's conservatives have argued over whether they should put a stronger emphasis on social policy and welfare protections.


Updated : 2021-07-29 02:25 GMT+08:00