Kohl's tripartite talks to cut costs and create employment collapse

THE future of Chancellor Helmut Kohl's plan to reduce German unemployment by half was in doubt yesterday following the collapse of talks between the government, employers and trade union representatives.

The talks were aimed at agreeing a consensus on public spending cuts and changes to the social welfare system.

Mr Dieter Schulte, head of the German Trade Union Federation (DGB), complained that the talks had ignored the task of fighting unemployment and focused instead on making existing jobs less secure.

"Nothing the government and the employers presented to us serves to create jobs," he said.

Employers leaders blamed the unions for the failure of the talks, claiming that social, costs needed to be cut to protect jobs.

Dr Kohl needs to cut 50 billion deutschmarks (£21 billion) from next year's budget to bring his government deficit under control.

But union leaders resisted plans to reduce sick pay for workers and freeze public sector pay.

The government insisted yesterday that it would press ahead with the changes despite union opposition and would introduce legislation to make it easier for employers to dismiss workers.

"There are some areas that are decided by consensus and others that are decided, by conflict," said Chancellery Minister, Mr Friedrich Bohl.

Dr Kohl is due, to present his package of spending cuts to the Bundestag tomorrow but, with the opposition Social Democrats commanding a majority in the upper house of parliament, the Bundesrat, he may be unable to push his entire reform programme through.

The collapse of the trilateral negotiations could spell the end of the Chancellor's Alliance for Jobs aimed at reducing employers' costs and cutting Germany's record unemployment figure of four million, in half by the end of the century.

Social Democrat leaders Mr Oskar Latontaine and Mr Rudolf Scharping accused the government of promoting social conflict by attacking the well are state.