Chancellor Schröder, the SPD, and Agenda 2010

Gerard Braunthal ()
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Gerard Braunthal: University of Massachusetts/Amherst, Amherst, MA, USA

Homo Oeconomicus, 2004, vol. 21, pages 543-572

Abstract: In March 1993, Chancellor Schröder announced that cutbacks to the social welfare system were necessary to improve the ?nancial and economic situation of the country. His program, proclaimed as Agenda 2010, covered ?nance, labor market, unemployment insurance, health, and pension reforms. It received the reluctant support of the SPD and the Greens. But the trade unions and the SPD’s left wing denounced the neoliberal program and urged, in vain, that left-Keynesian measures be taken to ameliorate the cutbacks. Adoption of Agenda 2010 has sparked protest demonstrations and weakened the SPD in numerous elections. It may produce the party’s defeat in the 2006 national election. The article tests the theory that welfare cutbacks will have negative electoral consequences for any party in power and suggests that the Schröder government should seriously consider adopting left-Keynesian proposals for a revised Agenda 2010 in order to reduce the steep income di?erentials.

Date: 2004

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Persistent link: http://EconPapers.repec.org/RePEc:hom:homoec:v:21:y:2004:p:543-572

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