Kohl pushes through austerity plan

THE odds on European Monetary Union arriving on schedule shortened significantly yesterday as the German government's controversial austerity programme cleared its, final parliamentary hurdle.

With 70 billion deutschmarks (£28 billion) lopped off next year's budget in one stroke, Germany is within sight of the target laid down by the Maastricht Treaty. Member states wishing to join the first wave of EMU in 1999 must keep their budget deficit below 3 per cent of GDP next year, and limit their public indebtedness to 60 per cent of GDP.

Without the cuts proposed by Chancellor Mr Helmut Kohl, Germany would have disqualified itself from EMU, aborting the entire project, as ministers pointed out to waverers during the debate. "This is an important decision day for Germany. The eyes of the world are upon us," Mr Theo Waigel, the Finance Minister, told MPs.

In the end, the package went through with four votes to spare, but the government whips left nothing to chance, mobilising all their able bodied MPs as well as the infirm. Mr Michael Glos, a senior Christian Socialist MP who had recently undergone a stomach operation, was flown in from Bavaria by helicopter, flanked by a doctor and a nurse. Mr Jochen Borchert, the Agriculture Minister recovering from spine surgery, was also miraculously in attendance.

The relief on the government benches when the result was announced was palpable. Mr Kohl slapped his thighs in delight ministers of the three coalition parties leapt off their seats to congratulate one another.

On the other side of the house, there was only bitterness and forlorn demands for the government's resignation. The government programme aims to slash welfare spending and stimulate the sagging economy. Sick pay, which currently amounts to 100 per cent of average wages, will be cut to 80 per cent. The dole is being cut, as well as funds for job creation programmes.

The retirement age for women is to be raised over the coming years from 60 to 65, and men's from 63 years to 65. The most contentious part of the package deals the most savage blow to workers' rights since the war.

Workers of enterprises employing less than to people will no longer be protected from dismissal. The unions say this opens the way to rampant capitalism of the Anglo Saxon kind, heralding the end of a the post war era of consensus on the welfare state.

But economists, industry and even large sections of the population support the government view that Germany's public spending must be slimmed down.

The country is slowly emerging from a recession, with no new jobs in sight. Unemployment, a post war record of 4 million, is set to stay, but the opposition has failed to convince the voters that it has better ideas for putting Germany to work again.