The German Government has accomplished demanding projects in the three years it has been in office. Others still lie ahead of it - for example inheritance tax. Just before the summer recess Chancellor Angela Merkel took stock of the work of her government.
The Federal Chancellor wants to continue the CDU-SPD Coalition's successful work. "I believe that everyone has played their part in our success," she told the Federal Press Conference in Berlin. But a great deal still remained to be done: "I expect us to get together and get along together - both the CDU and the SPD on the one hand and the Federation and the federal Länder on the other."
Unemployment falling
1.6 million new jobs have been created in those three years. In 2005 there were only 38.5 million people in Germany who were gainfully employed; today that figure is 40.2 million. For the Chancellor that is one of this government's most important achievements.
Not to forget: the unemployment insurance contribution has been halved, from 6.6 to only 3.3 per cent. That is an average of 270 euros less per year for each person paying contributions. If possible, the contribution will be lowered again on 1 January 2009, to 3 per cent.
Angela Merkel again rejected the introduction of a national statutory minimum wage. That would destroy jobs, she said. In Merkel's opinion, autonomy in collective bargaining takes priority over government wage fixing.
The Chancellor also pointed out that Germany already had a minimum wage, i.e. a long-term unemployment benefit (called ALG II). What was important in her view was that low-skilled workers found a way into the world of work, even if they then only earned very little. Low wages were topped up to the level of the so-called Hartz-IV benefits, she added.
The Chancellor again came out against including temporary work in the Posted Workers Act. This sector was an "instrument of flexibility in our working world". Collective bargaining agreements had been agreed, she said. That was why she saw no need to introduce a standardised starter wage through the Posted Workers Act.
In addition, the German Government would do all it could to achieve full employment. In some parts of Germany, such as the Munich or Stuttgart area, that goal had already been achieved: "That shows that it is possible." Nevertheless, the Chancellor did not want to commit to saying precisely in which year full employment could be achieved. Overall, demographic developments indicated that employment opportunities would increase over the coming years.
At the same time Angela Merkel called attention to those who are difficult to place on the labour market: The long-term unemployed, unskilled workers or those with an immigrant background. Further labour market policy measures would have to be developed for these people, she said.
Making headway on budget consolidation
The goal of the Government's work is now clear: In 2011 the German Government wants to balance the budget. That means that the Federation wants to be debt free. The 2009 federal budget will set the course for achieving that goal.
However, Angela Merkel also said that she was aware of people's concerns over rising inflation and high petrol prices. That was why the budget debate would be dealing both with the issue of budget consolidation and relieving the burden on families.
Now one would have to await the publication of the Subsistence Level Report in the autumn, Merkel said. Then decisions could be taken regarding the tax-free child allowance and child benefit.
Family policy facing up to reality
The Chancellor pointed out that a lot had already been achieved in that area to improve the situation of families: "We have addressed the issue of expanding childcare for the under-threes." The number of childcare facilities has nearly tripled compared to 2005 levels. In the west of Germany there are now 50 per cent more childcare facilities for very young children.
Angela Merkel also reminded her audience of another important reform: Parental allowance, which is now paid for all children born after 1 January 2007. Today young mothers and fathers are much better off because the parent looking after the child receives 67 per cent of their previous net income up to a maximum of 1,800 euros.
Pension system has been made fit for the future
The German Government has adopted the Pension Insurance Age Limit Adjustment Act, which raised the age of retirement is 67.
Raising the age of retirement from 65 to 67 above all aims to keep the rate of contribution to the statutory pension insurance system stable. The rate of contribution should be no more than 19.9 per cent until 2009. In the long-term, it should not rise above 20 per cent before 2020.
Climate and energy package for a better environment
In June the German Government put together its second climate protection package. It relies on intelligent energy management - and incentives to save energy: by means of the toll collection system for lorries, demanding energy standards for residential buildings, consumption-based heating costs and modern electricity networks.
Merkel looking forward to meeting Obama
On Thursday Angela Merkel will be meeting Barak Obama, the potential Democratic Party candidate for the US presidential elections. She said they would be discussing collaboration within NATO, climate protection and world trade. "But perhaps he also has his own ideas about what he wants to talk to me about," the Chancellor added.
