Lesser German agenda OK'd

What the Parliament passed on the day before the holiday recess could be termed Agenda 2010-Lite. The $19 billion in income tax cuts Schroeder proposed for 2004 were trimmed to about $10 billion. Social and labor changes, including the peeling back of worker protection laws, were softened so as not to incite Germans anxious about recent changes to their benefits.

The tax cuts and welfare package, according to many economists and corporations, will not significantly improve an economy with a 10 percent unemployment rate and a government deficit of 43.4 billion euro, but they do represent more than a symbolic recognition by Schroeder's Social Democrats and the opposition conservative Christian Democrats that ambitious changes are needed.

"Today cannot hide the fact that real reforms still lie ahead," said Andrea Merkel, Christian Democrat leader. "Germany is in the hardest crisis since World War II . . . with national debts and unemployment at record heights. Germany is at a crossroads."

Schroeder said: "The talk about the `German disease' is going to be over. The reform Agenda 2010 is a signal showing that Germany is moving ahead and taking up challenges."

Several of the laws that Parliament passed yesterday hinted at the direction in which the government is moving in restructuring a society extremely dependent on the state. Parliament, for example, voted to cut subsidies for commuters and homeowners to pay for the tax reduction. It also passed controversial bills to trim unemployment benefits and require welfare recipients to accept jobs offered them by the government or face losing their benefits.

"This is a good start," said Guido Westerwelle, leader of the Free Democrats, "but it's not much more than that."

For months the chancellor has been touting his Agenda 2010, threatening to resign if the plan wasn't passed by the holiday recess, as a bold vision to keep Germany economically competitive.