Chancellor Fails to Bring Unions and Employers Together

Faced with a job-killing economy, Chancellor Gerhard Schröder decided it was time to call together the country's business and union leaders on Monday evening for talks without taboos. But when the meeting was over, Schröder saw that his talks without taboos were nothing more than discussions without a future.

"It became clear that the basic positions of the employers' groups on the one hand and the unions on the other ... were too far apart," Schröder (photo) said in a television interview late Monday.

As a result of these colliding interests, the chancellor said he would take it upon himself to point the way for the two groups when he makes a major economic address on March 14 to the country's parliament. "We don't have any time to waste," Schröder said.

Alliance for jobs created

The chancellor made the comments after he failed to revive a round of talks he called "Alliance for Jobs". The alliance was created in December 1998, roughly two months after Schröder took office, as a forum where leading members of Germany's business community, labor unions and government could seek consensus solutions to the country's employment problems.

But the push for consensus created conflict as the unions and the employers fought over such things as apprenticeships, overtime hours and layoff rules.

These conflicts became public once again after Monday evening's meeting.

Dieter Hundt, who leads the Confederation of German Employers' Associations, said the time for talking was over. "Getting out of this misery will require more than a focus on trivial little details," Hundt (photo) said in a radio interview on Tuesday morning.

But the unions continued to express their skepticism about the employers' true aims. Hilmar Höhn of the German Trade Union Federation said the employers' goal was to advance a "widespread program designed to dismantle social policies."

Economy continues to slide

The breakdown of the talks took place against a backdrop of ever-worsening economic news.

More than 34,500 German companies filed for bankruptcy between January and November 2002, and the Federal Statistics Office estimates that the total number of business failures for the year could rise to 38,000, an increase of 18 percent from 32,200 the previous year.

The number of jobless Germans surged to 4.6 million, or 11.1 percent, in January. The economy nearly fell into recession in 2002 with an estimated growth rate of 0.2 percent. It was the economy's worst performance since 1993. The prospects are not much better this year with the government expecting a growth rate of 1 percent.

The end of the Alliance of Jobs began to take shape early last month, when Hundt presented a six-point plan designed to promote "a consensus between the government, unions and employers that would get us out of our crisis in growth."

In the plan, Hundt suggested that the employers and union make a deal. In addressing one of the unions' major concerns, he suggested that employers would guarantee a training position to every qualified young person. Such a suggestion would reverse a drop in such positions. Through September, for instance, the number of apprenticeships fell by 7.1 percent to 570,600.

In return, Hundt asked the unions to accept looser rules on one of their most cherished benefits -- protection against layoffs. Hundt proposed that the rules would apply to companies with more than 20 employers and take effect once a worker had been with a company for three years. Currently, those rules apply to companies with more than five workers.

But Michael Sommer, the leader of the German Trade Union Federation, rejected the program outright. "We will not allow these protections to be trampled on," Sommer said. "There is not one credible study that shows such changes would create jobs."

Minister to hold talks

Following Monday evening's meeting, Schröder said his labor and economics minister, Wolfgang Clement, would continue to hold separate talks with the unions and employers' groups about various issues in the hopes of finding a common ground. If sufficient progress is made, Schröder said he would be willing to meet with the groups once again.

But the chancellor said his main focus would be on the economic challenges presented by such subjects as globalization, and on the "fair and just solutions" he would offer in the March 14 address. "And the groups can then form their own opinion on them, good and bad," he said.