Agenda 2010
Encyclopedia
The Agenda 2010 is a series of reforms planned and executed by the German government which are aimed at reforming the German
social system and labour market. The declared aim of Agenda 2010 is to improve economic growth and thus reduce unemployment.
On March 14, 2003 Chancellor Gerhard Schröder
gave a speech before the German Bundestag
outlining the proposed plans for reform. He pointed out three main areas which the agenda would focus on: the economy, the system of social security, and Germany's position on the world market.
The steps to be taken include tax cuts (such as a 25% reduction in the basic rate of income tax) as well as big cuts in the cost absorption for medical treatment and drastic cuts in pension benefits and in unemployment benefits alike. In that, the programme closely resembles similar measures taken earlier in the USA (Reaganomics
) and the UK
(Thatcherism
). Those measures are also being proposed in accordance with the market liberal approach of the EU's Lisbon Strategy
. The name Agenda 2010 itself is a reference to the Lisbon Strategy
's 2010 deadline.
A series of changes in the labour market known as Hartz I - IV
started in 2003 and the last step, Hartz IV, came into effect on January 1, 2005. These changes affected unemployment benefits and job centres in Germany, and the very nature of the German system of social security.
.
While industrial leaders and both the conservative
and economically liberal
parliamentary parties such as the CDU
, the CSU, and the FDP strongly supported Agenda 2010 as it implemented their long-time demands, there was a strong upheaval in Schröder's own social democratic party
. After Schröder threatened to resign (with no obvious successor as Chancellor) if the changes were blocked in his party since they were so vital to his government's policy, he received an inner-party 80% vote of approval as well as a 90% approval from his coalition partner, the Greens
. However, Schröder had won the 2002 federal election with, among other things, the promise not to cut into the social security system. In a reaction to the policies declared and the measures taken, about 100,000 members of Schröder's SPD
left the party, but the more prominent left-wing politicians stayed on. Although the changes eventually went through, after devastating opinion polls Gerhard Schröder resigned as party chairman (not as Chancellor
) in February 2004 to give way to the more popular Franz Müntefering
.
This development left the PDS (with only 2 out of the 603 members of the federal parliament) as the only outspoken opponent to the Agenda 2010 policies although their course was somewhat inconsistent. In the Länder of Mecklenburg-Vorpommern and Berlin
, where there are SPD-PDS-coalitions, PDS ministers are actively implementing the Agenda 2010 laws.
The German Trade Union Federation (DGB), the most influential group outside parliament and historically interwoven with the SPD, massively stepped up their discourse against Agenda 2010, especially prior to the Hartz IV law in July 2004, but the rumble subsided quickly after a summit meeting with Schröder in August 2004. The trade unions suffered from a lot of attrition in that process as their members defected in droves either because the unions' attitude was perceived as too lenient or as too strongly opposed. There were no strikes against Agenda 2010 as the German constitution prohibits politically motivated strikes, but some demonstrations at least were organized and supported by the unions. The biggest demonstrations, held in Cologne
, Berlin
and Stuttgart
on April 3, 2004 brought together some 500,000 people.
In December 2003, the Bundesrat, dominated by the opposition CDU
party, blocked some of the reforms on political grounds until several compromises were reached, many of which put a particularly painful twist - for those affected, for example the unemployed or the ill - on the measures taken.
Dissatisfaction with Agenda 2010, and in particular with Hartz IV
, lead to thousands of people protesting in the streets of Berlin
, Leipzig
and other big cities particularly in eastern, but also western Germany over the summer of 2004 (see Monday demonstrations, 2004).
Dissent with the Agenda 2010 has also promoted the foundation of a new political party, the Electoral Alternative for Labor and Social Justice (WASG) by long-term SPD members and union activists. The WASG is squarely against the measures taken in the Agenda 2010 process and ran in the 2005 North Rhine-Westphalia
state election, where it gained 2.2% of the votes, against what it considers "the neoliberal consensus" displayed by the governing centre-left political parties and the more conservative opposition alike.
A debate about the socioeconomic results of the Agenda 2010 reforms was stirred by the release of a study conducted by the Friedrich Ebert Foundation
in late 2006. The study classified 4 percent of people living in West Germany as well as 20 percent of people living in East Germany as living in "precarious" socio-economic conditions. Although the topic of social conditions in Germany was much debated as a result of this study, with many people (including those in Schröder's own party) laying blame on Schröder and his Hartz IV reforms for a new economic inequality
in Germany, no policy changes have been enacted as a direct result of the study http://n-tv.de/721171.html. As of 2008, the wage ratio had been cut to a fifty-year-low of only 64.5%.
Another sign that economic inequality has risen in Germany can be seen in the fact that the number of Germans living below the poverty line has increased from 11% in 2001 https://www.cia.gov/library/publications/the-world-factbook/fields/2046.html, to 13% in 2004 http://www.destatis.de/presse/englisch/pm2006/p5050530.htm, and about 18% in 2007. According to 2007 government statistics, one out of every six children was poor, a post-1960-record, with more than a third of all children poor in big cities like Berlin, Hamburg and Bremen.
Voters seemed to respond to the Agenda 2010 and Hartz IV reforms negatively. In the 2004 elections to the EU parliament, the SPD reached an all-time postwar national election low of only 21% of the votes.
The SPD lost by a wide margin in the 2005 regional election in its "heartland" of North-Rhine Westphalia; the regional government was replaced by a CDU
-FDP coalition. The SPD losses were widely attributed to the voters' discontent with the Agenda 2010 reforms as workers and unemployed people defected from the SPD in droves. As a consequence, Chancellor Schröder admitted defeat and called for an early general election in the autumn of 2005, which was one year ahead of schedule
By 2011, unemployment had fallen from its 10% average of the mid-decade to around 7%, its lowest since the early 1990s.
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
social system and labour market. The declared aim of Agenda 2010 is to improve economic growth and thus reduce unemployment.
On March 14, 2003 Chancellor Gerhard Schröder
Gerhard Schröder
Gerhard Fritz Kurt Schröder is a German politician, and was Chancellor of Germany from 1998 to 2005. A member of the Social Democratic Party of Germany , he led a coalition government of the SPD and the Greens. Before becoming a full-time politician, he was a lawyer, and before becoming Chancellor...
gave a speech before the German Bundestag
Bundestag
The Bundestag is a federal legislative body in Germany. In practice Germany is governed by a bicameral legislature, of which the Bundestag serves as the lower house and the Bundesrat the upper house. The Bundestag is established by the German Basic Law of 1949, as the successor to the earlier...
outlining the proposed plans for reform. He pointed out three main areas which the agenda would focus on: the economy, the system of social security, and Germany's position on the world market.
The steps to be taken include tax cuts (such as a 25% reduction in the basic rate of income tax) as well as big cuts in the cost absorption for medical treatment and drastic cuts in pension benefits and in unemployment benefits alike. In that, the programme closely resembles similar measures taken earlier in the USA (Reaganomics
Reaganomics
Reaganomics refers to the economic policies promoted by the U.S. President Ronald Reagan during the 1980s, also known as supply-side economics and called trickle-down economics, particularly by critics...
) and the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
(Thatcherism
Thatcherism
Thatcherism describes the conviction politics, economic and social policy, and political style of the British Conservative politician Margaret Thatcher, who was leader of her party from 1975 to 1990...
). Those measures are also being proposed in accordance with the market liberal approach of the EU's Lisbon Strategy
Lisbon Strategy
The Lisbon Strategy, also known as the Lisbon Agenda or Lisbon Process, was an action and development plan devised in 2000, for the economy of the European Union between 2000 and 2010....
. The name Agenda 2010 itself is a reference to the Lisbon Strategy
Lisbon Strategy
The Lisbon Strategy, also known as the Lisbon Agenda or Lisbon Process, was an action and development plan devised in 2000, for the economy of the European Union between 2000 and 2010....
's 2010 deadline.
A series of changes in the labour market known as Hartz I - IV
Hartz concept
The Hartz concept is a set of recommendations that resulted from a commission on reforms to the German labour market in 2002. Named after the head of the commission, Peter Hartz, it went on to become part of the German government's Agenda 2010 series of reforms, known as Hartz I - Hartz IV...
started in 2003 and the last step, Hartz IV, came into effect on January 1, 2005. These changes affected unemployment benefits and job centres in Germany, and the very nature of the German system of social security.
Reaction to the changes
Politicians, industrial leaders, trade unions, media and population alike justifiably consider the Agenda 2010, especially the Hartz IV law, as the largest cut into the German system of social security since World War IIWorld War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
.
While industrial leaders and both the conservative
Conservatism
Conservatism is a political and social philosophy that promotes the maintenance of traditional institutions and supports, at the most, minimal and gradual change in society. Some conservatives seek to preserve things as they are, emphasizing stability and continuity, while others oppose modernism...
and economically liberal
Economic liberalism
Economic liberalism is the ideological belief in giving all people economic freedom, and as such granting people with more basis to control their own lives and make their own mistakes. It is an economic philosophy that supports and promotes individual liberty and choice in economic matters and...
parliamentary parties such as the CDU
Christian Democratic Union (Germany)
The Christian Democratic Union of Germany is a Christian democratic and conservative political party in Germany. It is regarded as on the centre-right of the German political spectrum...
, the CSU, and the FDP strongly supported Agenda 2010 as it implemented their long-time demands, there was a strong upheaval in Schröder's own social democratic party
Social Democratic Party of Germany
The Social Democratic Party of Germany is a social-democratic political party in Germany...
. After Schröder threatened to resign (with no obvious successor as Chancellor) if the changes were blocked in his party since they were so vital to his government's policy, he received an inner-party 80% vote of approval as well as a 90% approval from his coalition partner, the Greens
Alliance '90/The Greens
Alliance '90/The Greens is a green political party in Germany, formed from the merger of the German Green Party and Alliance 90 in 1993. Its leaders are Claudia Roth and Cem Özdemir...
. However, Schröder had won the 2002 federal election with, among other things, the promise not to cut into the social security system. In a reaction to the policies declared and the measures taken, about 100,000 members of Schröder's SPD
Social Democratic Party of Germany
The Social Democratic Party of Germany is a social-democratic political party in Germany...
left the party, but the more prominent left-wing politicians stayed on. Although the changes eventually went through, after devastating opinion polls Gerhard Schröder resigned as party chairman (not as Chancellor
Chancellor
Chancellor is the title of various official positions in the governments of many nations. The original chancellors were the Cancellarii of Roman courts of justice—ushers who sat at the cancelli or lattice work screens of a basilica or law court, which separated the judge and counsel from the...
) in February 2004 to give way to the more popular Franz Müntefering
Franz Müntefering
Franz Müntefering is a German politician and industrial manager. He was Chairman of the Social Democratic Party from 18 October 2008 to 13 November 2009, a position he already held from 2004 to 2005...
.
This development left the PDS (with only 2 out of the 603 members of the federal parliament) as the only outspoken opponent to the Agenda 2010 policies although their course was somewhat inconsistent. In the Länder of Mecklenburg-Vorpommern and Berlin
Berlin
Berlin is the capital city of Germany and is one of the 16 states of Germany. With a population of 3.45 million people, Berlin is Germany's largest city. It is the second most populous city proper and the seventh most populous urban area in the European Union...
, where there are SPD-PDS-coalitions, PDS ministers are actively implementing the Agenda 2010 laws.
The German Trade Union Federation (DGB), the most influential group outside parliament and historically interwoven with the SPD, massively stepped up their discourse against Agenda 2010, especially prior to the Hartz IV law in July 2004, but the rumble subsided quickly after a summit meeting with Schröder in August 2004. The trade unions suffered from a lot of attrition in that process as their members defected in droves either because the unions' attitude was perceived as too lenient or as too strongly opposed. There were no strikes against Agenda 2010 as the German constitution prohibits politically motivated strikes, but some demonstrations at least were organized and supported by the unions. The biggest demonstrations, held in Cologne
Cologne
Cologne is Germany's fourth-largest city , and is the largest city both in the Germany Federal State of North Rhine-Westphalia and within the Rhine-Ruhr Metropolitan Area, one of the major European metropolitan areas with more than ten million inhabitants.Cologne is located on both sides of the...
, Berlin
Berlin
Berlin is the capital city of Germany and is one of the 16 states of Germany. With a population of 3.45 million people, Berlin is Germany's largest city. It is the second most populous city proper and the seventh most populous urban area in the European Union...
and Stuttgart
Stuttgart
Stuttgart is the capital of the state of Baden-Württemberg in southern Germany. The sixth-largest city in Germany, Stuttgart has a population of 600,038 while the metropolitan area has a population of 5.3 million ....
on April 3, 2004 brought together some 500,000 people.
In December 2003, the Bundesrat, dominated by the opposition CDU
Christian Democratic Union (Germany)
The Christian Democratic Union of Germany is a Christian democratic and conservative political party in Germany. It is regarded as on the centre-right of the German political spectrum...
party, blocked some of the reforms on political grounds until several compromises were reached, many of which put a particularly painful twist - for those affected, for example the unemployed or the ill - on the measures taken.
Dissatisfaction with Agenda 2010, and in particular with Hartz IV
Hartz concept
The Hartz concept is a set of recommendations that resulted from a commission on reforms to the German labour market in 2002. Named after the head of the commission, Peter Hartz, it went on to become part of the German government's Agenda 2010 series of reforms, known as Hartz I - Hartz IV...
, lead to thousands of people protesting in the streets of Berlin
Berlin
Berlin is the capital city of Germany and is one of the 16 states of Germany. With a population of 3.45 million people, Berlin is Germany's largest city. It is the second most populous city proper and the seventh most populous urban area in the European Union...
, Leipzig
Leipzig
Leipzig Leipzig has always been a trade city, situated during the time of the Holy Roman Empire at the intersection of the Via Regia and Via Imperii, two important trade routes. At one time, Leipzig was one of the major European centres of learning and culture in fields such as music and publishing...
and other big cities particularly in eastern, but also western Germany over the summer of 2004 (see Monday demonstrations, 2004).
Dissent with the Agenda 2010 has also promoted the foundation of a new political party, the Electoral Alternative for Labor and Social Justice (WASG) by long-term SPD members and union activists. The WASG is squarely against the measures taken in the Agenda 2010 process and ran in the 2005 North Rhine-Westphalia
North Rhine-Westphalia
North Rhine-Westphalia is the most populous state of Germany, with four of the country's ten largest cities. The state was formed in 1946 as a merger of the northern Rhineland and Westphalia, both formerly part of Prussia. Its capital is Düsseldorf. The state is currently run by a coalition of the...
state election, where it gained 2.2% of the votes, against what it considers "the neoliberal consensus" displayed by the governing centre-left political parties and the more conservative opposition alike.
Consequences
The immediate aftermath of the Agenda 2010 reforms was rather negative as unemployment soared to over 5.2 million people in February 2005 http://news.bbc.co.uk/2/hi/business/4307303.stm and Schröder called German companies "lazy" for failing to hire more workers http://n-tv.de/726623.html. Beginning in 2005, however, unemployment figures have been falling and, in May 2007, unemployment was at 3.8 million people, a 5½ year low http://www.chron.com/disp/story.mpl/ap/fn/4850273.html. The apparent success of Agenda 2010 in reducing unemployment in Germany has been cited in the debate over extending long-term unemployment insurance benefits in the United States.http://www.thoughtsworththinking.net/2010/09/will-congress-debate-on-extending-unemployment-insurance-benefits-give-the-stock-market-a-post-election-hangover/A debate about the socioeconomic results of the Agenda 2010 reforms was stirred by the release of a study conducted by the Friedrich Ebert Foundation
Friedrich Ebert Foundation
The Friedrich Ebert Foundation is a German political foundation associated with the Social Democratic Party of Germany , yet independent of it...
in late 2006. The study classified 4 percent of people living in West Germany as well as 20 percent of people living in East Germany as living in "precarious" socio-economic conditions. Although the topic of social conditions in Germany was much debated as a result of this study, with many people (including those in Schröder's own party) laying blame on Schröder and his Hartz IV reforms for a new economic inequality
Economic inequality
Economic inequality comprises all disparities in the distribution of economic assets and income. The term typically refers to inequality among individuals and groups within a society, but can also refer to inequality among countries. The issue of economic inequality is related to the ideas of...
in Germany, no policy changes have been enacted as a direct result of the study http://n-tv.de/721171.html. As of 2008, the wage ratio had been cut to a fifty-year-low of only 64.5%.
Another sign that economic inequality has risen in Germany can be seen in the fact that the number of Germans living below the poverty line has increased from 11% in 2001 https://www.cia.gov/library/publications/the-world-factbook/fields/2046.html, to 13% in 2004 http://www.destatis.de/presse/englisch/pm2006/p5050530.htm, and about 18% in 2007. According to 2007 government statistics, one out of every six children was poor, a post-1960-record, with more than a third of all children poor in big cities like Berlin, Hamburg and Bremen.
Voters seemed to respond to the Agenda 2010 and Hartz IV reforms negatively. In the 2004 elections to the EU parliament, the SPD reached an all-time postwar national election low of only 21% of the votes.
The SPD lost by a wide margin in the 2005 regional election in its "heartland" of North-Rhine Westphalia; the regional government was replaced by a CDU
Christian Democratic Union (Germany)
The Christian Democratic Union of Germany is a Christian democratic and conservative political party in Germany. It is regarded as on the centre-right of the German political spectrum...
-FDP coalition. The SPD losses were widely attributed to the voters' discontent with the Agenda 2010 reforms as workers and unemployed people defected from the SPD in droves. As a consequence, Chancellor Schröder admitted defeat and called for an early general election in the autumn of 2005, which was one year ahead of schedule
By 2011, unemployment had fallen from its 10% average of the mid-decade to around 7%, its lowest since the early 1990s.