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Chancellor Gerhard Schröder Introduces "Agenda 2010" (March 14, 2003)

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Labor law and collective bargaining agreements together provide a detailed set of rules for labor relations in Germany. This creates security. But the system is often not as flexible and differentiated as it needs to be in a complex economy in international competition. In view of the economic climate and the labor-market situation, the responsible parties – legislators and collective bargaining partners – must make use of the scope they have to make it easier for businesses to hire new employees. To this end, it is imperative that options are written into collective bargaining agreements to give individual employers and their employees the leeway needed to promote employment and create secure jobs.

Incidentally, in practice – and this should also be made clear – there have been many success stories involving such exception clauses on the basis of current collective bargaining law. These successes should not be downplayed.

These successes have created jobs and training positions and have increased the competitiveness of the companies.

It is clear, however, that company agreements concluded on the basis of exception clauses in order to secure jobs and particular business locations require the approval of the collective bargaining partners.

But it also clear that dogmatic inflexibility is just as counterproductive as aggressive attacks on the collective bargaining system.

Appropriate regulations must be made in collective bargaining agreements in order to create a more flexible framework. That is the challenge facing the collective bargaining partners, and it is also their responsibility. Article 9 of the Basic Law makes independent collective bargaining a constitutional right. But it is not only a right, but also an obligation, because Article 9 obliges collective bargaining partners to assume responsibility for the economy and society in general. Individual interests cannot and may not be placed above the interests of society as a whole.

Therefore, I expect the collective bargaining partners to forge – along the lines of what already exists, but on a far broader scale – in-company alliances, as is already the case in many sectors. If this does not happen, then legislation will have to be passed.

[ . . . ]

Solidarity, the protection of the weaker members of society, and insurance against life’s risks are not only enshrined in the constitution. They are, at least in my mind, the foundation of our social order.

We have been witnessing a totally nonsensical debate – and not just in recent weeks – in which people are acting as if we were deciding whether to abolish the welfare state or maintain the status quo. In view of the radically changed conditions of the economic basis of our society, anyone who poses the question in this way has already lost.

It is perfectly obvious that a society such as ours can only have a really good future as a modern welfare state. Cohesion in a society in which demographics, the type and length of employment, but also cultural conditions are changing so dramatically can only be guaranteed in the form of a welfare state. But we have to stop burdening the labor factor (and it alone) with the costs of welfare benefits that serve society as a whole.

To be sure, we will achieve considerable savings by restructuring the system and reducing the bureaucracy. But it will be absolutely essential to cut entitlements and benefits that are already overburdening the younger generation and thwarting our country’s prospects for the future.

People working in factories and offices expect us to lower the burden of taxes and levies. Let me emphasize once more: We will do that in stages in 2004 and 2005. Our measures to modernize the social security system will reduce non-wage labor costs. That is certainly not always easy and the measures that we will have to implement in addition will definitely not be easy. We will limit unemployment benefits for people under fifty-five to twelve months and for people over fifty-five to eighteen months, because this is necessary in order to keep non-wage labor costs under control. Therefore, it is also necessary, against the backdrop of an altered job placement situation, to offer incentives to work.

Of course, no one is excited about this. That’s simply how it is, and I didn’t think it would be any different. Occasionally, unpopular measures have to be implemented anyway – and, by the way, I’m not greeting these measures with enthusiasm either. But they are necessary nonetheless. And that’s why we’ll implement them.

[ . . . ]

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