German Parliament Debates Reforms

German conservative chancellor Angela Merkel, who has won widespread praise for her appearances in the international arena and on the foreign policy front, started her address to the parliament on Wednesday with an optimistic assessment of the country's role in peace-keeping missions. She said that reunited Germany was now assuming greater responsibility in line with United Nations and European Union requirements.

Success on the international scene, however, was not the main topic of the parliamentary debate. As widespread protests against pay cuts and layoffs continue throughout the country, Merkel and her grand coalition government said they were stepping up efforts to find solutions to the pressing social and economic problems.

Labor reforms

The latest unemployment figures for Germany, which are published this Thursday, are good news for the government: The number of jobless has dropped below the 5 million mark.

Merkel, however, appeared exasperated after a rift in the grand coalition over labor reforms. Social Democrat (SPD) labor minister Franz Müntefering's announced he was halting the labor reforms because some members of Merkel's Christian Democratic Union (CDU) were taking steps away from the coalition agreement and asking for reforms that would go beyond the agreed-upon measures such as allowing companies to fire workers during the two-year probationary period.

"Let's first of all do what we resolved to do," Merkel said. "We made an agreement on this."

Merkel asked everybody to stick to the agreement and revisit the issue of Germany's job protection rules in two years. But some members of her own party remained impatient.

"The section on employment law in the coalition agreement does not go far enough," said Christian Wulff, the conservative premier of Lower Saxony. "It does not adequately reflect the real need for reform."

The trade unions, on the other hand, are stepping up pressure on SPD -- traditionally seen as a champion of workers' rights.

"The trade union's goal is for dismissal protection not to deteriorate, but rather to be maintained, or even improved," said Michael Sommer, head of the DGB trade union federation for German daily Die Welt. "Not everything that is in the coalition agreement must be implemented."

Energy reforms

Merkel announced that her grand coalition government would introduce a new long-term energy strategy in the second half of next year. This moves comes as a response to the growing concern about Germany's reliance on Russian natural gas and the rekindled debate about the country's nuclear phase out program.

"Just because we have a difference of opinion on this one issue doesn't mean we can afford to ignore the question of how our energy strategy out to 2020 should look," Merkel said in her speech before the Bundestag.

One of the most crucial pieces of legislation passed by outgoing Chancellor Gerhard Schröder's coalition of Social Democrats (SPD) and Greens, in the eyes of many, was a planned phase-out of Germany's atomic energy plants by 2020.

The idea, largely pressed by the environmentally-friendly Greens, was to focus on renewable energy and away from a crippling dependence on oil. It also found support at a time when safety concerns over nuclear power reactors were highlighted with accidents like the one in Chernobyl in 1986. The Social Democrats in the current grand coalition government made the nuclear phase-out an important part of the coalition agreement which was signed before the new government took office.

German Economics Minister Michael Gloss, who raised quite a few eyebrows when he suggested in January that Germany should reconsider prolonging the use of nuclear energy, toned down his views.

"The nuclear exist is written into law and at the present time I don't believe that the majority necessary to change this agreement exists in the German Bundestag," Glos said in an interview for German daily Handelsblatt.

Health reforms

The German chancellor reassured parliamentarians that her coalition government would now start working seriously on an overdue reform of the statutory health system. She said she was confident that the current clash of concepts could be overcome in a constructive manner.

At present, Merkel's conservatives are backing a flat monthly premium paid regardless of income, while the Social Democrats favor a broadening of the funding base by bringing in currently exempt groups of the population and making them pay in line with their earnings.

Next year the public health care system will have a budget hole between 8 and 10 billion euros ($9.6 billion to $12 billion). Germans, who have long enjoyed one of the most beneficial health care systems in Europe, will have to steel themselves for difficult changes ahead. As is, workers and employers split the monthly premiums to health care providers. About 10 percent of the population has elected out of the state-sponsored public system, preferring costlier, but some say better, private insurance.

Opposition strikes back

Oposition free-market liberal party (FDP) chief Guido Westerwelle accused the government of planning to raise taxes further as of next year despite pre-election promises to the contrary. He also demanded that the government should finally think hard about introducing a simpler tax system that citizens could relate to.

"Since you took office, you've been telling us that this is the sort of tax policy you can't do in Germany," Westerwelle said. "You should finally defend your own ideas and convictions instead of pandering to the interests of your Social Democrat coalition partners."

The floor leader of the opposition Left party, Oskar Lafontaine -- himself a Social Democrat renegade -- sharply criticized the government for what he described as grave budgetary neglect in the areas of education and research:

"It's outrageous that Germany is among the poorest performers within OECD countries when it comes to investing in research and education," Lafontaine said. "This is a situation that the new government seems unwilling to change. But it has to be changed, if we're serious about leading the country forward."

Despite the attempts by the opposition to tear apart the government's policy, the actors within the grand coalition don't have much to fear since they have a comfortable majority of seats in both houses of parliament. They can only self-destruct by engaging in internal struggles and failing to implement their own agreements.