Letter from Poul Nyrup Rasmussen, PES President,
published in the Financial Times on 22nd September 2005
Sir, I see no reason for supporters of economic reform to be in despair over the German election results ("Poll deals blow to advocates of EU economic reform", September 20).
Of course, a coalition that was unable to make progress in tackling unemployment would be bad news for everyone. But it is a travesty to portray Angela Merkel as Germany's radical reformer: Gerhard Schröder deserves credit for having pushed through substantial economic reform, whereas Ms Merkel's many years in Helmut Kohl's government were unremarkable.
More importantly, Mr Schröder's approach to reform, and Ms Merkel's failure to gain a majority, should teach Europe a valuable lesson about achieving economic reform in a democratic welfare state. Mr Schröder understands that reform must be combined with assurances about social protection. This is what conservatives neglect.
People know that the job for life is finished and that globalisation means change. What is lacking is a clear picture of the future social protection on offer in a world where the old certainties are crumbling. Unless Europe offers such a vision people will not support reform.
This is why the debate about "social Europe" is so vital and why the Nordic model of "flexicurity" has much to offer. It combines increased labour market flexibility with guarantees of social security (income protection during periods of unemployment as well as training and education).
Furthermore, reform cannot only mean making it easier to hire and fire people. It also means taking action to improve access to the labour market - such as anti-discrimination legislation and improved childcare facilities. This is another factor neglected by conservatives who seem keen simply to roll back, rather than modernise, the old welfare states.
So while we await the outcome of negotiations in Germany let us learn one fundamental lesson - there is no popular support for economic reform in Europe unless it is accompanied by an honest commitment to modernise social protection without cutting it. The German people did not trust Ms Merkel to do that. Mr Schröder's approach to assisting German growth deserves broad political backing.
