German jobs battle avoids French-style protests

BERLIN, Mar 22 (Reuters) As French students take to the streets to protest against cuts in job protection for young people, Germany is locked in a quieter backroom struggle over the future of its own cherished system of job guarantees.

Mindful of the need for harmony in her coalition of conservatives (CDU/CSU) and Social Democrats (SPD), Chancellor Angela Merkel this week dampened a row brewing over conservative calls to loosen job guarantees beyond the reforms agreed between the two sides after last year's election.

The government is planning to allow firms to fire workers without being required to give a reason during their first two years' service, a step similar to France's.

''But there is hardly going to be the same kind of uproar there has been in France, and not just because this culture of protest is foreign to Germans,'' the pro-business Financial Times Deutschland said in an editorial.

''No, the project threatens to be submerged in party wrangling between the CDU/CSU and SPD,'' it said.

The coalition agreement between the parties envisages extending the probationary period during which firms can fire new staff without showing cause from six months to two years.

But at the same time, employers would have less freedom to impose new limited contracts of up to two years' duration -- a restriction some conservatives, including Economy Minister Michael Glos, wanted dropped.

The SPD has stood firm, however, fearing that any further concessions could fatally weaken its image as the champion of workers' interests in the coalition.

A clearer picture will emerge after state elections this weekend. The issue is likely to be decided as much by political considerations as by economic arguments.

''Job protection is a political issue, it's a very sensitive subject in political discussion,'' said Holger Bonin, a researcher at the Institute for the Study of Labour in Bonn.

HARTZ IV Many of the social protections Germans once took for granted have in any case been chipped away since Merkel's SPD predecessor Gerhard Schroeder launched an ambitious and painful reform programme three years ago.

His ''Hartz IV'' labour reforms sparked spectacular but ultimately unsuccessful street protests and opposition eventually drained away, leaving a stripped-down benefit system and at least a grudging acceptance of tough reforms.

''Compared with France, there's definitely a sharper awareness of the need for economic reform,'' said Ralf Fuecks, a former head of the opposition Greens who now heads the Heinrich Boell Foundation, a think tank in Berlin.

''The problems and fears are certainly comparable -- the wish for security and the concern over the effects of the market economy -- but a major difference is that Germany has already gone through Hartz IV,'' he said.

How much further Merkel will be prepared to go will depend on how far she is willing to test her coalition with the SPD.

Relentless SPD attacks on the CDU's supposedly ''neo-liberal'' platform last year badly damaged the conservatives and tempered the party's reform ambitions.

Against the backdrop of burning cars and tear gas in Paris -- however unlikely in Germany -- analysts say the coalition is unlikely to go much beyond what it agreed last autumn.

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