Schroeder set to run election on workers’ rights ticket

GERMAN Chancellor Gerhard Schroeder’s party took aim at the “market radicalism” of the conservative opposition yesterday as it geared up for early national elections, signalling it will present itself as defending social programmes and workers’ rights.

Schroeder called for early elections after his Social Democrats suffered a stunning state election defeat in a traditional stronghold. He said voters' decision to end the party's 39-year grip on Germany's most populous state, North Rhine-Westphalia, had undermined the national mandate he needs to reform the struggling economy.

Party chairman Franz Muentefering said Mr Schroeder plans to clear the way for new elections by holding a parliamentary confidence vote on July 1 setting the scene for an election by September 18.

Conservative leaders were readying their challenge for the elections, closing ranks around the leader of the main opposition, Christian Democrats' Angela Merkel, as Mr Schroeder's likely challenger.

While recent polls have shown a strong lead for the Christian Democrats, the Social Democrats and their coalition partner, Foreign Minister Joschka Fischer's Greens, were confident of winning back voters.

"The aim is to make clear that we have to push through the reforms, for which the Chancellor needs support," Klaus Uwe Benneter, the party's general secretary, told ZDF television. "But we also have to show that what is at stake now is the social aspect of the market economy this autumn, we will have to conduct a debate between those who want ... to push through market radicalism and those to whom protection from dismissal and worker participation in managing companies is important."

Mr Schroeder, who took office in 1998 and narrowly won re-election in 2002, has pushed through limited trims in social welfare and unemployment benefits to reduce costs for business and spur growth. However, he has struggled with resistance within his own party.

This year, he has proposed cutting Germany's corporate tax rate but rejected opposition calls to review laws that protect German workers against firing.

Ms Merkel said unemployment currently running at 12% and sluggish growth would be at the centre of the opposition's campaign.

She has called for giving companies more leeway in negotiating pay deals outside the one-size-fits-all contracts negotiated by German unions.