Stricter Checks on Unemployed

Today, the cabinet will consider a draft for the so-called "Continuing Development Law" for the labor-market reform, which is intended to produce close to five billion euros in savings in Hartz IV by early 2010.

The changes, which the Grand Coalition would like to see take effect as of 1 August of this year, provide for much more stringent monitoring of and requirements for recipients of unemployment benefit II.

For example, nation-wide field units will in future check whether people are receiving state aid without entitlement... (SZ, in German)

First they tax (some of) the wealthiest (a little bit more); now they want to save money on the backs of the poorest ("unemployment II" is the basic social welfare support for non-disabled persons). They'll probably make political points on this as well - punishing welfare cheats and all...

I suspect the coalition gambling on accumulating enough political capital to push through a health insurance "reform" sometime later this year.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

For example, if I make a million euros per year and my income is increasing at a much faster pace than the majority of the population, wouldn't it make sense to adjust progressive taxation to reflect that pace?

Mikhail from SF

 German welfare system balks at Florida Rolf

A German pensioner who provoked outrage after it emerged he was getting more than €1,900 (£1,330) a month in welfare benefits while living on a palm-fringed beach in Florida was last night told the good life was over.

A German pensioner who provoked outrage after it emerged he was getting more than €1,900 (£1,330) a month in welfare benefits while living on a palm-fringed beach in Florida was last night told the good life was over.

Germany's welfare ministry confirmed that the 64-year-old - nicknamed Florida Rolf by German tabloids - would not be eligible for benefits from next year. Payments would only carry on if he returned to Germany, officials said.

The case has caused uproar as the country's leader, Gerhard Schröder, tries to reform the welfare system and grapples with a large hole in the country's public finances.

Last month it emerged that the German state was paying benefits to Florida Rolf which included €875 a month towards the rent on his Miami Beach apartment, as well as €730 a month in living costs and €146 for his cleaner. German welfare officials had earlier tried to reduce the bill.

But the pensioner - identified only as Rolf J - hired a lawyer who argued that he should not be obliged to go back to Germany, as this would mean he would not be able to see his friends any more and might become depressed.

A court in Lower Saxony accepted the argument and ordered the state to continue the €1,906 payments.

After the story broke last month, Chancellor Schröder abandoned discussions on Afghanistan to discuss what should be done in regard to Florida Rolf, declaring his case a "really horrible example".

Mr Schröder has been struggling to reduce Germany's huge budget deficit and high levels of unemployment.

Officials discovered that 1,055 other Germans in 83 countries were also claiming benefits. The bill came to €5.5m.

Yesterday, however, Germany's Social Democrat welfare minister, Ulla Schmidt, said the law would be changed. Only German expatriates who had a long-term illness or were in prison could get benefits. The others would have to return home if they wanted to receive the money, she said.

"Social security under palm trees won't happen in future," she added.

Last night, Florida Rolf said he had not decided whether to leave Florida - his home for 14 years - but he described the German government's decision as "pitiless".

Rolf, who spends most of his day on the beach, said he was once a millionaire banker. But he suffered a breakdown after losing his fortune and his wife, and decided to move to the US. "I always paid my taxes, and I lost my father in the war," he said. "I've done enough for Germany."

German officials said the change in the law would come into effect next April, and Florida Rolf would continue to receive benefits for three months after that. If he failed to return to Germany, the benefits would stop.

"We will still have to pay for Florida Rolf's return ticket to Germany," said a spokeswoman from social welfare ministry. "And if he gets depressed, we would pay for psychological treatment - but only if he comes back."  

"The USA appears destined by fate to plague America with misery in the name of liberty." Simon Bolivar, Caracas, 1819