German reforms mean 'hard road ahead'

BERLIN - Economy Minister Wolfgang Clement has rejected suggestions the German Government was putting the brakes on its reforms nearly two years before the next election in order to win back voters fatigued by the painful changes.

Vowing to push for lower corporate taxes, Clement said in a television interview that it was hard to see significant cuts in unemployment coming soon.

It was "just wrong" to accuse the Government of standing still, he said.

"There can be no talk of 'steady-hand' politics. We're making countless decisions ... on reforming and improving competitiveness, on energy regulations. We discuss reforms from early in the morning until late in the evening."

He said labour market reforms implemented last month had lifted unemployment above the politically sensitive five million level.

"We will carry on with the reforms," he said. "It is difficult in this phase to truly lower the unemployment level."

Clement said he supported appeals to leaders of German companies, including Deutsche Bank AG, to remember their responsibilities to German workers. Deutsche Bank has been criticised recently for plans to lay off more than 6000 staff despite surging profits.

Clement rejected claims by Bavaria's Premier, Edmund Stoiber, who accused the Government of fostering the rise of the far-right NPD party in eastern Germany by failing to tackle unemployment.

"It's simply despicable," Clement said, adding that successive Governments had failed to effectively tackle unemployment.

"I'm sick and tired of trying to explain about what's been squandered in the past," Clement said. "We're talking about a gigantic social problem. We have a hard road before us."

- REUTERS