In March 2003, Social Democratic Chancellor Gerhard Schröder
announced a series of reforms that his government plans to undertake
in order to deal with Germany’s pressing economic problems.
These reform proposals, known as Agenda 2010, include cutting
unemployment benefits, making it easier to hire and fire workers,
reducing health insurance coverage, and raising the retirement age.
The reforms mark a change in the direction of the German Social
Democratic Party’s (SPD) economic policy. Rather than promoting
traditional social democratic values such as collective responsibility,
workers’ rights, and the expansion of state benefits, Schröder declared
that “We will have to curtail the work of the state, encourage more
individual responsibility, and require greater individual performance
from each person. Every group in the society will have to contribute
its share.”1 Despite opposition to these reforms by labor unions and
leftist members of the party, Agenda 2010 was approved by nearly 90
percent of SPD party delegates at a special party conference in June
2003.2 Several of the reforms, including health care and job protection
reforms, were passed by the legislature at the end of 2003 and
took effect on 1 January 2004.