The cabinet of German Chancellor Gerhard Schröder continued its annual summer meeting on Saturday, bringing together the heads of both the national parties and the parliamentary groups for both government coalition partners, the Social Democrats and the Greens. At the center of the discussions, which are being held in Neuhardenberg Palace in the state of Brandenburg, are education, innovation and family policy. The cabinet also plans to discuss labor market reforms and efforts to promote growth in eastern Germany, where the economy is stagnant and the unemployment rate explosive.

At the opening of the retreat on Friday, Schröder called on his cabinet to stick to its current reform plans. "Our course is important," he said, "and we have to succeed." Otherwise, he warned, most would give up on any chance of turning Germany’s lame economy around.

Schröder’s "Agenda 2010" program has faced a major challenge from the leftist faction of his Social Democratic Party. Last week they formed a split-off group, "Election Alternative: Jobs and Social Justice," and have threatened to create their own political party. The leftist faction is seeking to block the current reforms, and Schröder is also being challenged by the opposition conservatives. The main argument among critics is that the government must assure them and German voters that it has a comprehensive reform plan that will actually deliver the final changes needed to repair the country’s failing labor market, lukewarm economy and a social system sagging under the weight of shrinking tax revenues and an aging population.

Paving the way for implementation

Despite the open discussion, there are no plans to make changes to the government’s current reform plans at the meeting. According to the parliamentary group leader of the Greens, Krista Sager, the meeting is instead intended to produce "accompanying measures" for recently initiated reforms.

The party leaders are also expected to discuss government’s main legislative policies for the second half of the administration, which runs through 2006.

Plans for the better promotion and integration of long-term unemployed Germans after the introduction of a law next year that will merge the countries unemployment and welfare benefits for the long-term unemployed are also on the table. Under the new plan, unemployed will be required to take most jobs offered to them with the risk of benefit cuts if they refuse to accept work.

On Saturday, Economics and Labor Minister Wolfgang Clement called on both business, communities and government to create new jobs in order to help bring the long-term unemployed back into the workforce.

Better toddler daycare

Family Minister Renate Schmidt is expected to introduce draft legislation that would require local communities to provide all-day care, based on need, for children under three years of age. The plan calls for the creation of 230,000 new care slots for the toddlers in the western German states; eastern German states would not be included in the bill because they have already reached an acceptable level, Schmidt said. The plan calls for money saved by communities through the merger of unemployment and welfare benefits to be funneled to the daycare programs to the tune of €1.5 billion.