BERLIN, 8 August — German unemployment broke through the critical four million barrier yesterday dealing yet another shattering blow to Chancellor Gerhard Schroeder’s hopes of beating his conservative rival Edmund Stoiber in the country’s September general election.
Figures released by the Federal Labor Office put the number of jobless at 4,047 million last month, the highest level for July since Schroeder was elected Social Democrat Chancellor four years ago and almost a quarter of a million more than in July last year.
“There is no doubt that the situation is serious,” said Florian Gerster, the labor office president, “We need economic growth, but given the fact that this was only 0.2 percent in the first quarter, we could hardly expect anything else,” he added.
Already rattled by sleaze allegations and charges of incompetence over unemployment and the economy, Schroeder’s Social Democrats had hoped that the jobless quota would improve at least slightly before the September poll. However yesterday’s figures — bolstered by German school leavers and sluggish growth offered little hope of an early upturn.
Schroeder attempted to sidestep his government’s role in the crisis: “The figures are not good, there is no argument about that,” he said, “It has to do with the worldwide economic downturn. We will have an upturn in the last quarter which provides a glimmer of hope, but not more,” he added.
However German business leaders joined with the conservative opposition to pile on the agony for the Social Democrats and pointed out that 35,000 businesses had declared insolvency this year alone. “This is a devastating balance sheet for the Red-Green coalition,” said Stoiber who pledged to combat unemployment by deregulating the economy and through tax cuts for medium sized businesses. “We will do this immediately after the elections,” he added.
“With more than four million unemployed we have almost reached the point we were at at the last election,” said the liberal Free Democrat employment expert Dirk Niebel in a pointed reference to Schroeder’s 1998 election pledge to cut unemployment to 3.5 million by the end of his term.
“We are content to be dependent on what happens in America and Asia, without thinking about what we can do to alleviate the situation ourselves,” added Ludolf von Wartenberg of the German Federation of Industry.
Opinion polls contained more bad news for Schroeder yesterday. A survey conducted for Stern magazine suggested that one of the Chancellor’s few electoral trump cards — his personal popularity — was beginning to evaporate. It showed that Schroeder’s lead had slipped two points to 38 percent, while Stoiber’s popularity rating had gone up by two points to 31 percent.
The Social Democrats’s dismal poll ratings prompted the party to start its election campaign almost three weeks ahead of schedule last Monday when the Chancellor bitterly attacked German business leaders for failing to ease unemployment and warned against the possibility of a war on Iraq.
The Schroeder election team is now hoping that a special government-backed commission on unemployment chaired by the Volkswagen manager Peter Hartz will meet with broad acclaim when it announces its findings next week. The commission has already suggested the idea of taking out a £1 billion loan to create more than a million jobs in unemployment-wracked east Germany.
Yesterday opposition conservatives dismissed the plan as unworkable: “Given the EU deficit criteria, the proposal could not be financed,” said Laurenz Meyer, the conservative party general secretary. “Mr. Hartz can rest assured that I will stand by his proposals,” countered Schroeder. (The Independent)
