German leader: Program cuts will continue (despite rout of Social Democrats in state election)

Bakersfield Californian ^ | 9/6/04 | Tony Czuczka - AP

[NormsRevenge]

BERLIN (AP) - Chancellor Gerhard Schroeder insisted on Monday that there was no turning back in cutting social programs despite pressure to reverse the unpopular measures after his party suffered a rout in a German state election.

Schroeder's Social Democrats lost 45 percent of their voter support Sunday in the small western state of Saarland, while the conservative Christian Democrats - the main opposition party at the national level - retained control of the local legislature and the governor's post.

Schroeder said Monday he "would have wished for a better result." But in a speech to labor leaders, he said remains convinced that his program of social-welfare trims begun last year "is the right way."

"We need to recognize the necessity of reforms," he said.

Yet Schroeder faced immediate challenges: a new round of weekly nationwide street protests Monday, two state elections in economically depressed east Germany on Sept. 19 and a Christian Democratic opposition brimming with confidence.

Schroeder has staked his political future on the reforms, which he says are needed to boost Europe's largest economy, reduce debt and fight unemployment. But the latest electoral defeat reignited criticism of his course inside his party and among labor unions.

Otmar Schreiner, a Social Democratic lawmaker from Saarland state, called on the government to reverse trims in health care, jobless benefits and other social programs begun by Schroeder last year. He urged the government to stop a planned Jan. 1 tax cut and pump up subsidies for low-wage jobs.

"These changes for the worse have to be reversed," Schreiner told the Berliner Zeitung daily.

In Sunday's vote, support for the Social Democrats plunged to 30.8 percent from 44.4 percent in the last Saarland election in 1999, the party's worst showing in the state since 1960.

Those capitalizing on the backlash included the small far-right National Democratic Party, which came out of nowhere to win 4 percent of the vote with a platform opposed to Schroeder's welfare-state cuts.

The centrist, pro-business Free Democrats re-entered the Saarland state parliament after a 10-year absence, just crossing the 5 percent hurdle for parliamentary seats.

Christian Democratic national leader Angela Merkel, widely tipped as Schroeder's challenger in 2006, called the result "sensational" and "a good omen" for upcoming state and local elections this month. Her party won more than 47.5 percent of the vote, a gain of two percentage points.

It was just the latest in a series of state election defeats for the Social Democrats since Schroeder won re-election two years ago. In elections to the European Parliament in June, the Social Democrats had their worst showing in a national ballot since World War II.