BERLIN, Oct 17 - German Chancellor Gerhard Schroeder is expected to survive a parliamentary vote on Friday on the biggest welfare state overhaul in decades, but still faces months of political wrangling that could cost him his job. The measures being decided on Friday are major planks of Schroeder's "Agenda 2010" reforms to cut back jobless, health and pension systems rapidly becoming unaffordable as a result of weak growth and an ageing population. They also cover 15.6 billion euros in tax cuts to be brought forward to 2004. Schroeder's slim nine-seat majority looks set to hold on Friday after he overcame a rebellion in his centre-left Social Democrats party against the reforms by softening measures to force the long-term unemployed to take on low-paid jobs. The vote, due around 10:30 a.m. (0830 GMT), is so tight, and so crucial for the government and Europe's largest economy, that Schroeder left a European Union summit a day early to attend it. In a strong show of Franco-German unity, he asked French President Jacques Chirac to represent him at the Brussels meeting on Friday. Schroeder has forced the left wing of his party to back reform by threatening several times to resign.
One member of the Greens, junior coalition partner to Schroeder's Social Democrats, has said he will abstain on Friday. Schroeder can afford eight abstentions or four "No" votes and still win the vote. All SPD deputies are expected to vote in favour, albeit grudgingly. But even after Schroeder wins Friday's vote, the reforms are almost certain to be revised heavily as most of them have to be approved by the Bundesrat upper house of parliament where the conservative opposition has a majority. Famous for numerous policy U-turns since taking power in 1998, Schroeder seems committed this time to seeing through the reforms aimed at ending three years of economic stagnation. "We're seeing a new Schroeder," said Manfred Guellner, Forsa polling institute director and Schroeder adviser. "His view is simply that if there's no majority behind him, he'll leave."
MARKETS RISE IN ANTICIPATION
Financial markets are waiting for the reforms as a signal that the "sick man of Europe" is capable of implementing changes adopted years ago by Britain and the Netherlands, but which France and Italy have yet to tackle. The DAX index of 30 blue chip stocks has risen around 60 percent since Schroeder first announced the measures in a March speech to parliament. Under the plans, people who have been unemployed for more than a year will be forced to take on work even if they are overqualified for it -- one example cited is an out-of-work minister who could be forced to become a sausage seller. Social Democrat left wingers don't like the measures, which they see as a betrayal of the party's principles. Florian Pronold, a leftwing SPD deputy, said: "They're based on the view that unemployed people are lazy and that you've got to make them do more to get their bread. "But mathematically it's hard to see how four million should people get a job when there are only 500,000 vacancies."//