"The Economic Situation is not Amusing"

In Nuremberg, the annual Social Democrat Party Congress is nearing its end.

The German economy was up on the agenda on Wednesday with discussions focusing on the latest economic downturn.

Despite the latest quarterly figures pointing to a recession, Finance Minister Hans Eichel defended his rigid saving scheme.

Standing firm

"We are standing firm" was his motto on Wednesday, as the SPD party conference debated economic and labour market policy.

Discussions were held on the predicted rise in unemployment and there were calls for the government to boost job creation, but most of the delegates were happy to back the cautious approach adopted by Finance Minister Eichel. Reiterating his goal of reducing Germany's debt, Hans Eichel rejected trade union demands for an economic stimulus programme.

"Anyone who looks at the example of Japan can see that the stimulus programmes there only led to a national debt that's two-and-a-half times the size of ours. And Japan is now in recession," Eichel told the delegates.

Eichel did say he was disappointed that the number of unemployed people in Germany was still so high. But he defended government efforts to create jobs.

The delegates, however heard little on labour market deregulation and the streamlining of a bloated welfare state – measures regarded by experts as the best ways to tackle Germany's structural unemployment.

It is said that Chancellor Schröder is worried about losing voters on the left if he introduces labour market reforms before next year's federal election.

Despite the debates, the conference atmosphere among the delegates remained peaceful. But unease is spreading. One leading SPD businessman underlined his worries by saying in English: "The economic situation is not amusing."

War protests

But the proceedings were disrupted on Tuesday evening. A group of youngsters from the eastern German city of Jena sitting in the gallery unfurled a banner with the words: "SPD War Party is yet again taking part in the murder", referring to the war against terrorism. The group whistled, and shouted until they were eventually thrown out. A young man from the group said: "We wanted to disturb the normality of the conference, as war is not normal".