Schröder Pledges Jobless Subsidies to East

Schröder met with East German ministers just hours after announcing that his government wouldn't change the newly passed Hartz IV law to reduce jobless benefits to ease concerns from eastern states that too little is being done to help unemployed people in the east.

However, the chancellor assured the prime ministers that the Social Democrats would focus employment subsidies on the eastern part of Germany and other regions with an unemployment rate of more than 15 percent, He added that 41 percent of the €6.35 billion ($7.9 billion) earmarked for job-creation measures would be allocated to Eastern Germany next year.

Schröder went face-to-face with the Eastern leaders after all six Eastern German states voted against the law which would see 2.5 million long-term unemployed drawing on private wealth, retirement savings and property owned by husbands or wives before becoming eligible for state benefits in the upper house of parliament on Friday.

The new law, which takes effect next January, also states that benefit payments will average €345 a month in western Germany and €331 in the east, excluding housing, heating and other supplements.

Eastern Germany's unemployment rate was 18.1 percent in June compared with 8.1 percent in the West.