Germans protest welfare state cuts

BERLIN -- About 100,000 people took to the streets of Berlin on Saturday to demonstrate against Chancellor Gerhard Schroeder's plans to trim Germany's generous welfare state, the biggest show of public opposition so far to his drive to revive Europe's largest economy.

Answering the call of labor unions and left-wing groups, including the former East German communist party, a huge column of marchers snaked through downtown Berlin, chanting slogans against the government's plans.

Police and organizers estimated the crowd to be about 100,000, underlining the task facing Schroeder as he tries to counter a jobless rate of over 10 percent. The protest could also embolden critics within his coalition government, which has only a slender majority in the lower house.

The chancellor suggested he might resign if parliament fails to pass proposed new laws, including cuts in jobless benefits and a reform of the creaking state-run pension system.

Dubbed "Agenda 2010," the package also includes putting more pressure on the unemployed to take available positions and an expansion of part-time work. The government says the package will ease the pressure on employers, who joint-fund many programs, releasing funds for investment that could lift the economy after three years of near-zero growth.

Schroeder plans to bring forward by a year tax cuts originally scheduled for 2005 in an attempt to boost lackluster consumer spending.

But critics complain that the burden falls unfairly on the weakest groups in society, such as the elderly and the unemployed.

Earlier this month, Schroeder softened planned changes in employment laws to win over doubters in his own Social Democratic Party, and he said Friday that he was confident that his coalition stood firmly behind his program.

Speaking on Germany's ARD television, he insisted the welfare state had to be shaken up if it was to survive.

"One can only be fair when one is prepared for change," Schroeder said. "We're making these changes to free up resources for investment in future tasks," he said, naming better education and child-care as key to making the German economy more competitive.

Schroeder also faces a challenge from the conservative-led opposition, which can block legislation in the upper house of parliament, where the government is in a minority. Conservative leaders say they will insist on changes to the laws before waiving them through.