By IPS Correspondents
BERLIN, Apr 29 2003 (IPS)

Perhaps it is hardly surprising that a Pop Song making cruel fun of Chancellor Gerhard Schroeder should recently shoot straight to the top of the charts and become Germany’s No.1 hit.

What with the country’s economy at a low point, jobless levels topping the 4.5 million mark and plans afoot for a drastic revamp of the welfare state by his red-green government, Schroeder has been the man many Germans have loved to hate of late.

Schroeder’s finance minister, Hans Eichel, has also been a target after raising several different taxes and levies in recent months. A caricaturist employed by Germany’s biggest tabloid newspaper has portrayed him as a vampire, blood dripping from its fangs.

Anger at Schroeder is primarily linked to his controversial ‘Agenda 2010’ programme, which aims to sharply reduce long-term jobless benefits, limit job security guarantees and drop the requirement that employers help pay for sick benefit insurance. This is a cruel betrayal of SPD working class roots.

SPD party rebels are indirectly threatening to wreck his red-green government if he goes ahead with the reform package, claiming it is a betrayal of the party’s working-class roots.

Schroeder comes under attack also from the country’s trade unionists, many of whom are traditionally SPD voters.

This week has seen the chancellor boldly defending his government’s policies. His reform plans, he says, are aimed at "renewal" of the country’s economy and of society’s current ills, but they would not come at the expense of social fairness and justness.

Schroeder’s popularity rating in Germany has plunged in recent months, but the SPD’s national executive is backing his measures. In Berlin Monday 28 party leadership members voted in favour of the reforms. Only four were opposed, with a further four abstaining.

The current controversy raging around Schroeder’s leadership could come to a climax on Thursday when trade unionists, many of whom are traditionally SPD voters, assemble for May l Labour Day celebrations.

Curiously, months ago, long before serious discussion had started on economic reforms, Schroeder accepted the DGB’s (German Trade Union Federation) invitation to address its main May Day rally.

Appearing with Schroeder will be Michael Sommer, the DGB’s powerful leader, who has repeatedly slammed the government proposals. 50,000 trade unionists are expected to attend the rally.

"The Chancellor will come. I see no reason why we should exclude him because of our differences," said Sommer on German TV, when asked if Schroeder was likely to get a stormy reception from the trade unionists.

Schroeder made a passionate 45-minute plea for SPD members to support his plans at a regional Social Democratic Party conference in Bonn Monday. It was the first of four such meetings ahead of the crucial June 1 special party congress in Berlin, when a decision will be taken on the reforms.

Rounding on party left-wingers at the meeting, Schroeder said there was no choice but to forge ahead with the reforms. In a rapidly changing, complex, world the nation faced huge challenges.

"A decisive question," he said, "is whether the government has the capability in an economic crisis and in a severe international situation to lead the country effectively. That is the question that must interest and preoccupy every Social Democrat," he said, sternly glancing at rebellious party members in the audience.

Ursula Engelen-Kefer, a deputy leader of the German Federation of Trade Unions, famed for her fiery championing of workers’ rights, seemed notably unimpressed by the Chancellor’s words. The reform package, she fears, will come at the expense of the less well off, and damage workers’ interests.

Engelen-Kefer is also unhappy at talk of the German age of retirement being hiked from the current 65 to 67 – a move aimed apparently at helping to rescue the country’s creaking pay-as-you-go state pension system.

The proposal, she said was deeply unfair, given that most workers nowadays were retiring at 60. "At present, they only get a proper pension from the age of 65 and must accept considerable reductions during the interim period," said the trade union leader in TV interview.

Adding to Schroeder’s woes is the sudden "political" reappearance of Oskar Lafontaine, a former Saarland premier and rival of Schroeder’s. His career seemed ended when, without warning, he quit as the red-green government’s finance minister in March 1999, after a bitter power struggle.

Now a columnist for the mass-circulation daily ‘Bild’ Lafontaine – a hero still to many on the party’s left wing – used his newspaper platform to attack the Chancellor for allegedly breaking promises made in last year’s election campaign not to tamper with social welfare programmes.

Lafontaine said he "was not prepared to stand by and see the people duped."

Later at a peace demonstration in Frankfurt, Lafontaine took aim at Schroeder again, claiming that, "reform today obviously doesn’t stand for improvement but social cuts and scrapping employees’ rights. We don’t have to put up with that. We don’t need to go back to the 19th century," he said.

In his "Bild" column the next day there was further niggling. Lafontaine, who ran for Chancellor in 1990 and was also SPD chairman until leaving the government, wrote that rank-and-file Social Democrats were "not prepared to betray the people."

Family Affairs Minister Renate Schmidt, a deputy chairwoman of SPD, came to her boss’s defence, berating the left-wing members of parliament for collecting SPD members’ signatures on a petition criticising Schroeder’s plans.

Their actions were a gross breach of trust and "very damaging for us," she told Munich’s ‘Sueddeutsche Zeitung’ newspaper.

Support for Schroeder and the SPD slumped badly after last September’s national election, when the grim state of the public finances and the economy forced Berlin to raise the prospect of higher taxes and increased social welfare contributions.

The chancellor clawed back popular support again by his hard-line opposition to the war in Iraq, but an opinion poll published in the weekly ‘Stern’ magazine showed that support for the SPD had fallen by three percentage points from a week ago to 30 percent.

Schroeder’s problem is that his coalition with the Greens has only a slim majority in Parliament. Its combined vote total is 306 but it needs at least 302 votes for a Bundestag majority. Now 12 rebellious SPD members have begun actively campaigning against his plans, and threatening to vote against the government.

Schroeder, who has staked his future on the outcome of the June 1 special party conference, says SPD dissenters are "playing with fire" if they vote against the proposals. "Nothing less than the party’s ability to govern will be at stake," he warns.

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