Employment Alliance for eastern Germany misses employment target

On 5 December 1997, the first review of the implementation of the "Employment Alliance" for eastern Germany, which was concluded in May 1997, showed that the employment target for 1997 had been missed. From November 1996 to November 1997, the average number of people in the labour force decreased by 187,000 to 6.2 million, whereas unemployment rose by 262,700.

On 22 May 1997, an "Employment Alliance" for eastern Germany was concluded between the German Federal Government, the German Trade Union Federation (DGB), the German Salaried Employees' Union (DAG), the Confederation of German Employers' Associations (BDA), the Confederation of German Industries (BDI), the German Association of Chambers of Commerce (DIHT), the Central Association of German Crafts (ZDH) and the Associations of the Credit Institutions (Kreditgewerbe). The primary objectives of the pact were to speed up the transformation process of the eastern German economy, to boost growth, to reduce unit labour costs, to stabilise employment in 1997 at the level of 1996, and to create 100,000 new jobs in each of the following years. Among other measures to be executed by the state and the private sector, the "Joint initiative for more jobs in eastern Germany" provided for several guidelines regarding industrial relations in eastern Germany - such as employment-oriented collective bargaining, working time flexibility, "hardship clauses" and special regulations for small and medium-sized enterprises (DE9706117F).

The agreed first review by the signatories of the Alliance's implementation took place on 5 December 1997 at the Erste Wirtschaftstag Ostin Potsdam. The Federal Minister of Economics, Günter Rexrodt, stated that contrary to expectations it had not been possible to stablise the labour market in eastern Germany. Instead, according to figures provided by the Federal Employment Service, the average number of people in the eastern German labour force decreased by 187,000 to 6.2 million from November 1996 to November 1997. In the same period, the number of unemployed people in eastern Germany rose by another 262,700. However, Mr Rexrodt expects employment to grow by 80,000-100,000 up to the end of 1998. As regards the social partners, the minister welcomed the conclusion of numerous employment-oriented collective agreements in eastern Germany during the second half of 1997.

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