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Mon, Jan 03, 2005 - Page 12 News List

Germany braces for protests over welfare payments

AFP , BERLIN

Protesters were expected to hit the streets in more than 30 German cities today, two days after a sweeping reform of welfare payments aimed to cut long-term unemployment went into effect.

But unfazed by the protests, Economy Minister Wolfgang Clement told the weekly Bild am Sonntag he was confident "that the most comprehensive reform of the job market in the history of the Federal Republic of Germany will eventually be a success."

"I will be responsible for its success or failure," he added.

The controversial package of labor market reforms known as Hartz IV will have a wide-reaching impact on the lives of 4.5 million people out of work in what is still Europe's economic powerhouse.

It is impossible to tell for the moment exactly how many unemployed will lose money under the new system or who will benefit from the changes.

But those expected to feel the changes hardest are the long-term jobless and the 2.7 million people who the Federal Labor Agency says have used up their benefits and now receive only minimum welfare payments.

The Agency says less than 10 percent will lose their welfare payments altogether, a figure the unions reject. They put the figure at 27 percent and say 48 percent will have their income reduced.

To calculate the new benefits, the Federal Labor Agency analyses peoples' estate, their expenditure and their needs, which is already sparking controversy.

The government argues that overhauling Germany's generous social welfare system, once the envy of the world, will persuade people who have been out of work for more than a year to accept a job, no matter how low paid.

But support groups for the unemployed have criticized a move they say will make the poor poorer.

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