Schröder Urges Reform as SPD Celebrates 140th Anniversary

In an interview with public broadcaster ARD, German Chancellor Gerhard Schröder called on members of his Social Democratic Party (SPD) to support his proposed cuts to the German welfare system and labor market reforms or risk being passed up by the times.

“We have to realize that solidarity can only be preserved if we adapt to radical changes in the context of newly defining what the welfare state actually means and what we can still afford in the future,” he said.

SPD split over reforms

Schröder’s package of economic reforms known as “Agenda 2010” has opened up a nasty split within the 140-year-old party, as left-wing hardliners have accused the chancellor of abandoning the SPD’s social democratic roots. But Schröder has linked his political future to the unpopular reforms, seeing little alternative as German growth has stalled.

In recent years, Europe’s largest economy has ground to a halt under the weight of its generous welfare system and constricting labor market policies. Economic growth slowed to only 0.2 percent in 2002 and gross domestic product actually shrank in the first quarter of this year. German unemployment is running at over ten percent.

A recent survey showed only half of SPD members completely support the government’s reform course. Many in the party are also members of trade unions, which flatly reject the government’s plans, saying they are “socially unjust” and “neo-liberal” in design.

Schröder on Friday denied he was abandoning SPD social traditions: “The values themselves don’t change, rather just the instruments to achieve them.”

Giving in to demands from the party’s grassroots, Schröder has agreed to hold an SPD party congress on June 1 to debate the reforms. The event has effectively become a vote of confidence, since the chancellor has indirectly threatened to quit if he doesn’t not garner the party’s support.

Party support at postwar low

Despite the party’s long history, the debate over Agenda 2010 has led the SPD to postwar lows of 26 percent in the latest opinion poll. That miserable showing may eventually convince parliamentary backbenchers to support the government, since toppling Schröder and new elections would likely lead to a political bloodbath for the party.

Over 2,000 guests, including several European center-left leaders, have been invited to Berlin to celebrate the founding of German social democracy in the eastern town of Leipzig in 1863. The anniversary’s motto is “Renewal is our Tradition,” in hopes of conveying the current government’s reform agenda.

On Wednesday evening, Schröder got support for his proposals from British Prime Minister Tony Blair and Swedish Prime Minister Goran Persson, both of which have already pushed through painful reforms at home.

"He's doing the right thing and he will be rewarded," Persson told the Reuters news agency. "As soon as it begins to work, opinion will swing. I encourage him to go ahead and do it quickly because it will hurt and it will hurt even more if he waits."