Steinmeier defends German jobs plan from attack

Mon Aug 3, 2009 12:38pm EDT

* Steinmeier says 4-million new jobs target is realistic

* Rival parties, industry mock his 10-year plan on jobs (Updates with quotes from speech in pars 4, 12)

By Erik Kirschbaum

BERLIN, Aug 3 (Reuters) - German chancellor candidate Frank-Walter Steinmeier said on Monday his plan to help create 4 million jobs in a decade was realistic and dismissed criticism it would revive the planned economy of communist East Germany.

Steinmeier, Germany's foreign minister and vice chancellor, denied his headline-grabbing proposal was an election ploy to distract from his flagging campaign. He said the government could only set the right framework for jobs.

Political rivals on the right and far left of Steinmeier's centre-left Social Democrats (SPD) mocked him, saying his "10-year-plan" was reminiscent of economic programmes in the former East Germany.

"This isn't a batch of cheap promises," Steinmeier said in a speech on Monday. "This is about getting the right perspective and setting ambitious goals. I believe full employment in the next decade is possible -- with new ideas and the right course."

Some industry leaders also poured scorn on Steinmeier's ideas ahead of the Sept. 27 election. The SPD is running about 12 points behind Chancellor Angela Merkel's conservatives (CDU/CSU) in opinion polls.

Unemployment -- a sensitive issue in Germany where a surge in joblessness in the 1930s led to the rise of the Nazis -- is now at 3.4 million, or a rate of 8.2 percent. That is up from 3.2 million (7.7 percent) a year ago.

Economists expect the headline unemployment level to climb towards 4 million by the end of 2009 due to the deep recession and some are even forecasting a rise towards 5 million by 2011.

Steinmeier, 53, said his proposal was anything but an "act of desperation", as the Free Democrats and editorials charged.

"These are not a bunch of dodgy promises," Steinmeier had told reporters in Berlin earlier on Monday.

"Creating 4 million new jobs by 2020 is realistic and a lot of economic experts consider the target possible. Naturally the state isn't going to be creating these new jobs but it can set up the right framework for a sensible economic development."

He vowed to make job creation a centrepiece of his campaign. Steinmeier believes 2 million jobs can be created in sectors that reduce energy consumption and save natural resources -- along with other green tech areas such as "electro-mobility".

"No other country in the world has better conditions to become the world's top supplier for machines and products that save energy," Steinmeier said in his speech.

A further million jobs could be created in the healthcare sector. Especially in the care of the elderly there is scope for several hundred thousand new jobs, he said.

Steinmeier says another 500,000 new jobs can emerge in the "creative economy" -- such as film, media and entertainment. Also, he says 500,000 jobs in the services and trade sectors can be created by 2020.

Steinmeier hopes to cut into the conservatives' big poll lead while Merkel is on a 2-1/2 week holiday until Aug. 12. He will spend the next week touring 14 of Germany's 16 states, making dozens of stops at small companies across the country. (Additional reporting by Holger Hansen; editing by Dominic Evans)

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