GERMANY: German chancellor Gerhard Schröder will sit down with his political opponents in Berlin today to hammer out a cross-party pact for Germany, a last-ditch effort to turn around the country before next year's general election.
The challenge is immense: economic reforms introduced in January have yet to have a noticeable effect; unemployment is now at a 70-year high of 5.216 million, or 12.6 per cent; domestic consumer demand is still worryingly low and leading economists have cut their growth forecasts to as low as 0.6 per cent for the current year.
But Mr Schröder's problems are not just economic; he is trying to break Germany's "entitlement culture" - the local variation of Ireland's "compensation culture". Chancellor Schröder has criticised this "culture of welfare freeloading", where even the well-off take from the state what they are entitled to, rather than what they need.
The "entitlement culture" runs deep in Germany, as was clear from remarks this week by one of the country's most senior judges.
He recalled a case of a social welfare recipient who took a constitutional challenge because the state refused to pay for new bicycles for his children. Other cases in front of Germany's constitutional court arose from allegedly poor hospital food, another because the state wouldn't cover the €4 cost of a bottle of shampoo during a hospital stay.
The last months have seen a collective belt-tightening among the entitlements of Germany's unemployed. Since January, welfare payments are paid for shorter periods and are means-tested, so partners of millionaires no longer can claim the dole as they had been doing.
However, even with tighter welfare rules Germany's unemployed are still entitled to a rent-free apartment as well as a television, fridge and washing machine - all paid for by the state on top of their social welfare payment.
It's not just social welfare recipients who get handouts in Germany: young couples are entitled to a "homebuilders allowance", so that a couple with two children who build a new home are entitled to a total of €32,720.
The government has argued for years that the allowance, introduced to address the postwar housing shortage, is obsolete, particularly considering the depopulated areas in the east with swathes of empty housing.
Opposition conservatives have always staunchly defended the allowance, but reports suggest Mr Schröder will today propose abolishing it, using the money saved to cut unemployment insurance contributions by 1.5 per cent.
German president Horst Köhler rang the alarm bell on Tuesday that Germany could no longer continue living beyond its means. He said that Germans' "entitlement culture" and resistance to reforms was a "betrayal" of the postwar spirit that built up Germany into an industrial giant.
Urging a new era of "energy, creativity and solidarity", he said: "Our total debt is currently at €7.1 billion, that's 330 per cent of our gross domestic product. Do we finally see what a burden this is for our children and grandchildren?"