BERLIN (AP) — The German parliament’s upper house on Monday halted a proposed reform of the country’s unemployment benefit system, a central policy of center-left Chancellor Olaf Scholz’s government.
Germany’s main center-right opposition bloc objects to the overhaul on the grounds that it would reduce pressure and incentives for people to take available jobs. Scholz’s three-party coalition doesn’t control a majority in parliament’s upper house, which represents Germany’s 16 state governments, and regions in which the opposition bloc governs prevented the reform from passing.
The move will send the legislation to a committee whose job is to resolve disputes between parliament’s lower and upper houses. It’s not clear what compromise might emerge.
The proposed reform would replace a system drawn up nearly two decades ago by a center-left government under then Chancellor Gerhard Schroeder, which tightened benefit rules for the long-term unemployed.
The so-called “Hartz IV” system was part of a package of reforms that was credited with helping make Europe’s biggest economy more robust. It has long been loathed by left-wingers and contributed to years of weakness for the Social Democrats, the party of Schroeder and Scholz.
The government’s proposal foresees raising the level of benefits from 449 euros ($465) per month to 502 euros. It also calls for reducing penalties against recipients who balk at taking jobs, particularly in the first six months, and loosening restrictions on assets they can hold and the size of their apartment. It wanted the overhaul to take effect Jan. 1.
The Union bloc says it agrees with the raise in the benefit level but objects to other points.