Merkel Looks Ahead

Saying that Germany is in better shape this year than it was in 2005, Merkel underscored that the country couldn't afford to rest on its laurels.

"Despite all our successes we may, under no circumstances, sit back," Merkel said, according to a transcript of the speech to be broadcast later on Monday, Dec 31.

"The risks for our economy and our growth are too high, especially due to global factors."

Fighting joblessness the main goal

Merkel said Germany's economic situation is "noticeably improving," emphasizing successes in slashing the number of jobless and getting closer to achieving a balanced budget.

Germany, she said, had taken a "good step forward" in creating more jobs. "A million fewer unemployed, a million gainfully employed - who could have thought such a development possible two years ago?" she said.

But, she warned, Germany's figure of 3.5 million unemployed was still too high. Merkel said the fight against unemployment remained one of next year's major goals.

"That means saving existing jobs while creating conditions in order to generate new ones," she said.

Less than two years after spiking to five million, Germany's number of jobless fell in November to 3.278 million people. It's the lowest level in 15 years, according to figures released by the Federal Labor Office earlier in December.

Amid recent signs of weakening economic growth, economists expect the decline in the jobless total to slow in 2008.

Spotlight on the family

The chancellor's speech focused on family values and she said the family had "moved back to where it belongs: in the center" of society.

In a bid to reverse a falling birth rate, Merkel's coalition government this year introduced a big hike in public subsidies for new parents. Both mothers as well as fathers who now choose to stay at home are also eligible for greater financial support.

Merkel said there would be more day care options for young children in 2008.

Referring to a string of child murders and cases of abuse and neglect of children that have rocked the country in recent months, Merkel urged Germans to be more alert to such incidents.

"We need a culture of closer inspection, not looking away," said Merkel, adding that the state must intervene in cases where parents are overwhelmed with taking care of their children.

Merkel's government recently approved a package of measures to allow authorities to take swifter action when abuse or neglect of a child is suspected. It includes regular health checkups for babies and toddlers and obliges doctors to report suspicious cases.

A boost to Germany's image

On the international level, Merkel said other nations carefully followed developments in Germany and the country's improved economic performance.

Germany's rigor as well as clear values when it comes to representing economic interests and political goals on the world stage is closely watched by others, Merkel said.

"Both have noticeably boosted Germany's image in the world in the past two years," she added.

Merkel's foreign policy has been marked by a public stand on human rights, at times even at the expense of jeopardizing business links.

The chancellor spoke of "bigger responsibilities" in a year that saw Germany hold both the six-month rotating European Presidency and host the G8 Summit.

Germany, she said, had risen up to the challenge by managing to make the EU "capable of action" again. The 27-member bloc agreed on a landmark treaty earlier this month to reform and streamline the EU's institutions.

Climate change, a topic that Merkel has been vigorously championing, got only a brief mention.

"Land of opportunity"

Closer home, Merkel said she was hopeful that Germany would manage to draw on its old strengths as a land of ideas and of solidarity among people to prove itself in the globalized world.

This year, two German scientists won Nobel Prizes -- for chemistry and for physics.

"We can feel that Germany is again on track to becoming a land of opportunity for everyone," Merkel said, adding that politics would play its part to further reinforce the strengths of the country.