Merkel renews pledge to make unemployment top priority

Chancellor Angela Merkel assured Germans in an open letter published Thursday that her new government has "the firm will to solve the problems" of Europe's biggest economy and renewed her pledge to make the fight against unemployment her top priority. Her message, titled "Together we are stronger," is being published in newspapers and magazines from Thursday through Monday. In it, Merkel said she believes Germany "is full of opportunities."

But she also stressed that her compatriots must be ready to accept change, because "only that way can we preserve our prosperity and the high social level of Germany for ourselves and the coming generations." Merkel, a conservative, took office Nov. 22 at the head of a "grand coalition" with predecessor Gerhard Schroeder's center-left Social Democrats, making the best of an inconclusive election result that gave neither major party a parliamentary majority.

She has won positive reviews and poll ratings in Germany for her initial performance. The government has pushed through its first legislation aimed at taming Germany's large budget deficit, and Merkel was credited with helping secure a deal on the European Union's future budget. However, the chancellor has made clear she expects her government to be judged by its performance in cutting the persistently high jobless rate, currently 10.9 percent, that undermined Schroeder's government.

"Fighting unemployment is the top priority," she wrote in Thursday's letter. "I cannot accept the fact that we can find no employment for so many men and women in our country who are willing to work." The new government's program foresees an increase in value-added tax in 2007 and cuts to subsidies as it tries to combine boosting the long-sluggish economy with trimming the German budget deficit.

"The 'grand coalition' has the firm will to solve the problems and master the challenges," Merkel said. She pointed to plans to approve soon an investment program worth Ђ25 billion (US$29 billion), aimed at supporting economic growth, and to an intended cut in a payroll tax for unemployment insurance. "We are reducing non-wage labor costs so that, finally, more people can get to work," she said. Amid increasingly optimistic forecasts for Germany by economists over recent weeks, Merkel has been eager to spread an atmosphere of confidence. The letter comes in an addition to the chancellor's traditional televised New Year's message, to be broadcast this weekend. "Let's surprise ourselves with what is possible and what we can do," she wrote. "Let's move our country forward together", reports the AP. N.U.