Hollande Lauds German SPD’s Courage for Welfare-Cutting Agenda

French President Francois Hollande lauded the “courage” of Germany’s Social Democrats to cut benefits and scale back job protection a decade ago, crediting the policies for buoying the country’s labor market.

Speaking at a gala to mark the SPD’s 150th anniversary in the eastern German city of Leipzig, Hollande praised former German Chancellor Gerhard Schroeder’s decade-old Agenda 2010 reforms for adapting traditional socialist values of workers’ rights and protections to “modernize the welfare state.”

“Progress also meant that courageous decisions can be taken in difficult times to preserve jobs and to anticipate industrial changes,” Hollande told a crowd of more than 300 invited guests, including Chancellor Angela Merkel. “Therefore, your country has an edge over other countries today.”

Stung by plummeting poll numbers as he tries to overhaul France’s labor rules to spur growth, Hollande pointed to the measures passed by Schroeder’s government in 2003 as embracing the “reality” of struggling economies.

In doing so, the French president touted an agenda from which the SPD has distanced itself as it struggles to retrieve voters alienated by the same policies and unseat Merkel in national elections four months away.

SPD chancellor candidate Peer Steinbrueck has defended Agenda 2010 as breaking with a cumbersome welfare state and breathing life into Germany’s job market. Still, this month he appointed as his chief social-policy adviser a labor leader, Klaus Wiesehuegel, who has criticized the policies for placing an unnecessary burden on low-income earners.

SPD Drops

Steinbrueck’s party ceded a percentage point yesterday in a weekly Forsa poll, garnering 23 percent, compared with 41 percent, one point more than last week, scored by Merkel’s Christian Democratic bloc. Merkel is seeking a third term in Sept. 22 elections.

Schroeder, Germany’s last SPD chancellor who was ousted by Merkel in 2005, was in the audience as his fellow party members also praised his legacy while stressing his refusal to contribute to the U.S.-led invasion of Iraq.

Schroeder “found the courage to lead Germany out of its agony and kept the country out of a disastrous war-adventure in Iraq,” SPD Chairman Sigmar Gabriel told the audience.

The Agenda 2010 package made it easier to fire staff, forced those out of work for more than a year to accept any reasonable job offer and reduced long-term welfare benefits.

As it took effect, the jobless rate declined from a postwar high of 12.1 percent in March 2005 to 6.8 percent in December 2011, the lowest since reunification in 1990. Unemployment held at 6.9 percent this April.

In France last month, the jobless tally rose for a 23rd month to the highest at 3.32 million or 11.5 percent.

To contact the reporters on this story: Patrick Donahue in Leipzig at pdonahue1@bloomberg.net; Brian Parkin in Leipzig at bparkin@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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