Schroeder formally re-elected to second term

Chancellor Gerhard Schroeder was confirmed for a second four-year term in office today after the German parliament voted to approve his centre-left coalition’s victory in elections last month.

Schroeder won 305 votes in the 603-seat lower house, three more than required, but still reflecting the narrow majority that voters handed his Social Democrats and the junior coalition partner, the Greens party.

The 58-year-old has led Germany since 1998. In a series of ceremonial events today, he and his new Cabinet will be sworn in at the Reichstag parliament building.

They will become the first administration to start out in Berlin since the government moved its seat back to the revived German capital.

Schroeder, sitting on the government bench, grinned as he received a bouquet of red and white flowers after parliament president Wolfgang Thierse announced the vote result.

Thierse wished his Social Democratic party colleague “strength and success” in his new term.

But the chancellor’s biggest burden has not changed: the stagnant economy.

Even before officially beginning his new term, Schroeder angered business leaders and opposition conservatives with post-election admissions of a £10bn budget hole and plans to squeeze more tax revenue out of individuals and businesses.

Critics complain that Schroeder is off to a disappointing start, showing little sign of tackling Germany's highly regulated labour market and costly welfare state programmes head-on – moves seen as spurring growth in Europe’s biggest economy.

Also dogging Schroeder is conflict with Washington over his staunch opposition to a US invasion of Iraq, a stand that is credited with helping him win re-election.

The White House was particularly angered when Schroeder’s justice minister reportedly compared US President George Bush with Adolf Hitler during the campaign. She was not considered for the new Cabinet.

Beset by an unemployment rate around 10%, near-zero growth and the rising cost of social programmes, Schroeder has placed high hopes on a newly created super-ministry combining labour and economics.

Its head, Wolfgang Clement, will be in charge of making good on pledges to promote low-wage and temporary jobs through the government’s nationwide network of job placement offices – a key plank of Schroeder’s campaign.

Clement’s credentials include expertise in restructuring a region with many smokestack industries as governor of North Rhine-Westphalia, Germany’s most populous state.

Determined to show he is getting down to work, Schroeder planned to hold his first Cabinet session this evening. But his first policy speech to parliament was scheduled for next Tuesday.