Few Protest as Welfare Cuts Take Hold

Unfazed by the protests, Labor and Economics Minister Wolfgang Clement (photo below) told the weekly Bild am Sonntag he was confident "that the most comprehensive reform of the job market in the history of the Federal Republic of Germany will eventually be a success."

"I will be responsible for its success or failure," he added.

The controversial package of labor market reforms known as Hartz IV will have a wide-reaching impact on the lives of 4.5 million people out of work in what is still Europe's economic powerhouse. It is impossible to tell for the moment exactly how many unemployed will lose money under the new system or who will benefit from the changes.

But those expected to feel the changes hardest are the long-term jobless and the 2.7 million people who the Federal Labor Agency says have used up their benefits and now receive only minimum welfare payments. The agency says less than 10 percent will lose their welfare payments altogether, a figure the unions reject. They put the figure at 27 percent and say 48 percent will have their income reduced.

To calculate the new benefits, the Federal Labor Agency analyzes peoples' estate, their expenditure and their needs, which is already sparking controversy.

Generous system

The government argues that overhauling Germany's generous social welfare system -- once envied throughout the world -- will persuade people who have been out of work for more than a year to accept a job, no matter how low paid. But support groups for the unemployed have criticized a move they say will make the poor poorer.

Other observers have called for recognition that even after the reforms are introduced, the German welfare state will be relatively generous to the unemployed. For example, the point at which the value of an unemployed person's residential property is taken into consideration is €200,000 ($270,000) and only 9 percent of homes in western Germany and three percent in eastern Germany are valued higher.

Monday's protests came in the wake of demonstrations last year which were held for weeks on Mondays, similar to rallies which brought down former East Germany's communist regime in 1989. Anti-Hartz IV Monday protests eventually fizzled out but widespread unease with the reform translated into severe electoral blows for Chancellor Gerhard Schröder's Social Democratic Party.