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Is Germany's 'father of reform' advising Paris?

Ben McPartland · 28 Jan 2014, 11:37

Published: 28 Jan 2014 11:37 GMT+01:00

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The name of Peter Hartz is notorious in Germany for being the man behind "Agenda 2010" - the painful economic reforms implemented under former Chancellor Gerhard Schröder.

The French media went into a spin on Tuesday when reports emerged in the German press that Hartz has been drafted in to steer Hollande through France's own period of painful economic restructuring.

If it's true it will no doubt be welcomed by the French Right and European finance chiefs but not by unions and members of Hollande’s own Socialist party.

According to the regional German newspaper Saarbrücker Zeitung, Peter Hartz was received by Hollande at the Elysée Palace back in November, where the French head of state grilled him on the reforms he fathered in Germany.

Hartz, who has already written a 60-page plan on how to save the French economy for think tank “En Temps Réel”, has so far not commented on the reports.

Hollande made waves earlier this year when he moved to rebrand himself as a Social Democrat announcing plans to reduce public spending, decrease labour charges and even cut taxes.

Those plans, made in is New Year’s address to the world’s media, led to him being dubbed "François Schröder" and "François Blair", after the former European leaders.

However he was also criticised by elements on the left and conscious that the move could alienate his core supporters, the Elysée played down Hartz’s importance and denied he was advising the president.

“François Hollande received him, two months ago after asking for an informal interview,” an advisor to the French president, was quoted on BFMTV.

Hartz, a former board member at Volkswagen was charged by Schröder to reform Germany’s labour market. Between 2003 and 2005 several laws were passed, based on his propositions, but Hartz himself was never a minister.

Among the most controversial of Hartz’s reforms was the “ein-euro job” – jobs paid at €1 an hour for unemployed people. The legislation also reduced the period of time that those out of work could claim unemployment benefit from 32 to 12 months.

Germany's retirement age was raised from 63 to 65. Hartz was also credited with the system “Ich-AG”, the German equivalent to France’s auto-entrepreneur system for self-employed.

His supporters credit him with reducing unemployment in Germany, which dropped by three percentage points between 2003 and 2013 and for increasing competitiveness of German industry.

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But his critics blamed him for an increase in poverty and a rise in the number of workers living on the bread line. They also point to the hike in the number of temporary workers in Germany which tripled between 2003 and 2012. In 2012 the poverty rate hit 15.2 percent, according to a report the following year.

When Hollande celebrated the 150th anniversary of Germany's Social Democratic party, he commended Schröder's reforms.

"Progress is also making courageous choices at difficult times to preserve jobs. That's what Gerhard Schröder did," Hollande said.

In 2007 Hartz was given a two-year suspended jail sentence and a fine for his role in a bribery scandal involving lavish holidays and prostitutes.

Ben McPartland (ben.mcpartland@thelocal.com)

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