Bundestag, 14 March 2003: Agenda 2010
Bundestag, 14 March 2003: Chancellor Schröder gives a landmark policy speech, announcing unprecedented reforms to Germany’s social system and labor market (photo: Marco Urban).

On 14 March 2003, at a speech before the Bundestag, Gerhard Schröder unveiled Agenda 2010, the most extensive reform of the social system and labor market ever planned by the German government. The proposed reform package grew out of a structural crisis that was marked by high levels of unemployment, slow growth, and financially overstretched welfare programs. Internationally, Germany had become known as the “sick man of Europe.” Agenda 2010 answered the challenges posed by globalization and an aging population at home, making the labor market more flexible, keeping social welfare contributions affordable, and lowering taxes for employees and companies. The reforms also provided for increased investment in research, education, and childcare. Agenda 2010 succeeded in establishing the idea of a welfare state that creates more individual opportunity while demanding more individual responsibility. Due to the new burdens and welfare cuts associated with Agenda 2010, however, the reforms met with strong social and political resistance, though not enough to block their ratification. Thanks to the reforms, Germany’s economic competitiveness grew stronger and the number of unemployed dropped by around two million. Even more impressively, these improvements occurred even as the global economy faced severe headwinds, with many industrialized countries witnessing sizeable rises in unemployment.

For more information, see Statement by Gerhard Schröder from 14 March 2003.