Schroder's future on the line

A REVOLT by Left-wing MPs over German economic reforms was today threatening to bring down Chancellor Gerhard Schroder's government.

Schroder is confident he has bought off dissenters in his party but a crucial vote in the Reichstag today was still expected to be close run.

He has been dealmaking all week with the Left-wingers who are seeking to scupper reforms in his ambitious Agenda 2010 programme, which wants to restructure Germany's welfare state and kick-start the economy.

Six rebel Left-wingers had threatened to oppose this round of the reforms, which aim to cut off welfare to jobless people who refuse to work, no matter what sort of job they are offered.

Schroder, who has threatened to resign before if he did not get his way, claims this vote is the ultimate test of his authority and competence. He says defeat would lead to him stepping down and the government would fall, with two potential outcomes.

The first would be a grand coalition with the opposition conservatives. The second would be fresh elections.

Schroder has a majority of just four seats in the lower house of the German parliament for this vote and said his future rests on pushing through the wider reform package by Christmas.

He has offered concessions in a bid to appease the Left, saying that the jobless would only be expected to take on work at the minimum wage in their area and that the long-term unemployed would receive tax breaks for private pensions.

At least two of the dissident six now seem to be on board. Schroder's social democrats and the Green coalition partner party whips are bringing in the lame, sick and apathetic in a bid to secure a solid majority.

As a sign of his insecurity, he and Foreign Minister Joschka Fischer flew home early from a European Union summit on Thursday, having authorised French President Jacques Chirac to speak for Germany.

Today's vote is a cliffhanger because the opposition is against this part of the Agenda 2010. It wants even tougher measures to trim the welfare state of billions of pounds and make Germans pay more for their health care.

The main proposals still need the approval of the upper house of parliament, which is controlled by the opposition.