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Last Updated: Monday, 28 April, 2003, 16:07 GMT 17:07 UK
Schroeder contains party rebellion
Gerhard Schroeder arrives for a party meeting on Monday
Schroeder is battling party opposition to reform plans
German Chancellor Gerhard Schroeder has won party backing for key reforms, hours after hinting that a rebellion might lead him to resign.

The victory came as two new sets of economic figures brought more gloom for the chancellor.

Mr Schroeder is trying to push through changes to health, social security and employment systems.

Some left-wing members of his Social Democratic Party (SPD) have tried to block the reforms - known as Agenda 2010 - warning that they will hit some of society's more vulnerable members.

Major changes to the Agenda 2010 programme would remove the basis of my work and force me to take consequences
Gerhard Schroeder

Party leaders meeting on Monday backed Mr Schroeder by 28 votes to four, with four absentions.

Mr Schroeder welcomed the result, although correspondents pointed out that the left-wing rebellion had not been completely quashed.

Earlier, he had warned that he might quit if the reforms were blocked.

"Anyone who wants to vote for something other than that is in the Agenda 2010 programme has to know they are removing the contents of the government's work," Mr Schroeder told journalists.

"Major changes to the Agenda 2010 programme would remove the basis of my work and force me to draw certain conclusions."

Minor details could be discussed, he said, but the main pillars were essential.

"The basic line of Agenda 2010 cannot be called into question because it and its implementation are needed to keep Germany on the right track," he said.

"Those who are of a different point of view... must know that they put into question the ability of the SPD to govern."

Mr Schroeder, beset by ongoing high unemployment and a stagnant economy, wants to start introducing the reforms next January.

The changes include:

  • cutting benefits for the long-term unemployed
  • making it easier for employers to make people redundant
  • reducing the level of service offered by the health system
  • making changes to Germany's pension system.

The Social Democrats rebels have already managed to force Mr Schroeder to hold a special party congress in June, to discuss the reforms.

And 12 members of parliament have signed a petition opposing the package, demanding that Mr Schroeder put the plans to a ballot of the party's 700,000 members.

German unemployment
Mr Schroeder said after Monday's result that he was confident of victory at the congress.

Mr Schroeder has previously hinted that he might resign if controversial tax increases were blocked. On that occasion too, last December, the tactic appeared to put down a looming rebellion.

Monday's meeting came amid more economic gloom for Germany.

The Ifo index, which measures the business climate, showed an unexpected fall in April - dashing hopes of a surge after the end of the war.

And the German Government made a third cut in its 2003 growth forecast, down from 1% to 0.75%. Even the reduction, however, leaves the forecast above the 0.5% predicted by many experts and by the opposition.

Analysts said the news of the Ifo fall gave added urgency to Mr Schroeder's reforms.

"It really underpins the urgent need for comprehensive structural reforms," said economist Thomas Hueck.

Scant relief for jobless Germans
03 Apr 03  |  Business
Schroeder's economic headache
06 Mar 03  |  Business
German economy at a standstill
26 Feb 03  |  Business

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