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Germany - greater dynamism growth and employment

"Germany gets going - greater dynamism for growth and employment"

In a policy statement delivered in parliament on July 3 Chancellor Schröder spoke of a new mode of thinking brought about by Agenda 2010. He noted that Germany is moving forward in a process of change. He appealed to the opposition to cooperate constructively with the government in the difficult months that lie ahead.

"Germany is willing to undergo change. Germany is moving forward." Chancellor Gerhard Schröder used these words in a policy statement delivered on July 3 to describe a new mode of thinking brought about by the Agenda 2010 reform program. He said Germany needs this change in attitude, moving away from the protection of vested interests and towards the shaping of opportunities for the future. "A paradigm change is taking place. People in Germany are willing to support the process of change." On July 2 the government approved the implementation of a planned tax reform a year ahead of schedule, doing so on the basis of Agenda 2010. Schröder noted that "this is so that people will be able to spend more of what they earn on quality of life and on their children."

Three-part strategy: reforms, subsidy reduction, and tax relief

Schröder focused his policy statement on the connection between Agenda 2010, tax relief, and the federal budget for 2004. The Agenda 2010 reforms and the 2004 budget form the foundation for a three-part strategy that is intended to give the government the latitude it needs to give the working population a large tax cut and in doing so to generate impetus for growth and employment.

The government will be able to cut 45 billion euros from the federal budget over the long term under the Agenda 2010 program. What is involved here are not budget cutbacks for their own sake. What is involved is the need to reduce government spending to a necessary minimum in order to have the resources that will be required for the future. What is involved is "taking the necessary step forward towards more responsibility, more initiative, and more interest in the common good," Schröder said. "Towards greater opportunities for the future instead of rigidly insisting on the preservation of vested interests. Towards a new balance between economic necessity, social cohesion, and societal change. That's what this government wants."

Government willing to engage in constructive cooperation with opposition

Parallel to Agenda 2010 the government approved a draft budget for next year that begins to address the need to reduce subsidies and to make room for growth. Schröder concluded his policy statement with an appeal to the opposition to cooperate constructively with the government in the difficult months that lie ahead. He said people in Germany aren't interested in party-political bickering. They want to see decisions that will take the country forward and his government, at least, is willing to engage in this kind of non-partisan cooperation.

Schröder indicated that his government wants to do more than send out a brief signal of change. "We want to tell people that it is worthwhile living and investing in Germany. And we want to tell them not be misled by those who are issuing warnings or downplaying the impetus we are trying to create with our tax cuts." Schröder went on to say that the policy his government is pursuing has been well thought out. "Germany can shoulder the burden. Germany can manage. The country is moving forward. I hope those who are in positions of political responsibility outside the government coalition will do the same."

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