Schröder, Unions Still Disagree

The meeting in the chancellery on Tuesday was an attempt to improve the working relationship between the government and the unions, which has hit new lows in recent weeks due to the latter's strong opposition to Schröder's planned welfare reforms. The talks were aimed at hammering out a common position and improving the climate between the two groups.

But while the name calling has come to an end for the moment, an agreement on the most substantive issues was not produced. "We did not come any closer in regards to the content of the reforms," Michael Sommer, head of the German Trade Union Federation, told reporters after the two-hour meeting.

On the government side, spokesman Bela Anda told reporters the differences that existed before the meeting were still present when it adjourned. Despite indications by Sommer that Schröder and Social Democratic (SPD)head Franz Müntefering had agreed to amend the labor market and welfare reforms should they lead to social instability, Anda said Schröder remained firm.

"There were no promises, none whatsoever," he told reporters.

Widespread opposition

The Hartz IV reforms, named after their author, VW personnel chef Peter Hartz, were drafted to stabilize Germany's struggling social security system and provide a boost to the country's stagnant economy. But they have met with widespread opposition from many sectors of society, particularly in eastern Germany and from left-leaning organizations.

The reforms, set to take effect on Jan. 1, would reduce benefit levels for the long-term unemployed and put added pressure on the unemployed to take jobs offered them, even if they are in fields outside their area of expertise or training.

Union leaders have strongly criticized the pressure the reforms place on the unemployed. Requirements that those without a job accept work below set wage levels or in unfamiliar fields have been attacked as "unreasonable."

The meeting on Tuesday improved the working atmosphere between the traditional allies, which has become confrontational in recent weeks. Klaus Wiesehügel, head of the construction union IG Bau, told reporters the mood between the two had improved greatly since the last meeting, which ended in a heated argument.

A reversal of opinion

Ahead of the meeting, the DGB's Sommer reversed an earlier position and called for closer cooperation with the SPD. Just two weeks ago he recommended that the unions in his umbrella organization vote against the SPD in the next federal election in 2006. Likewise, Frank Bsirske, head of the service union Verdi, told members of his union that Schröder's reform policies had failed. The two have now signalled a greater willingness to discuss issues such as tariff contracts, minimum wage and tax breaks.

Schröder, too, has softened his criticism of the labor groups. While just a few weeks ago he accused them of exaggerating the negative impact of the reforms and driving voters into the hands of opposition parties, he now called for a common strategy.

Election at stake

The chancellor has staked his political future on Agenda 2010, which also includes reductions in health care, a revision of job protection laws, changes in welfare payments and a tax cut.

But with a marathon of state and local elections scheduled for the coming month, Schröder and the Social Democrats can ill afford to further alienate the public. Working together with the unions is their first step towards reassuring core voters that the SPD is still listening to the public's concerns.