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German leader's welfare gamble pays off

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Pilloried in the streets and pummelled in opinion polls, German Chancellor Gerhard Schroeder has not had an easy year. Yet only months after having his political obituary written, the steward of the world's third-largest economy is staging a remarkable comeback.

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This summer, massive demonstrations against Mr Schroeder's economic reform programme shook his centre-left coalition government. Tens of thousands of Germans took to the streets each Monday for months to protest against planned cuts to the country's once comfortable welfare state.

Mr Schroeder's popularity sank to new lows after loyal supporters publicly accused him of betraying the roots of his Social Democratic Party (SPD). As the federal government in Berlin floundered, the SPD was hammered in a string of state and local elections by the conservative opposition.

Realising he had tied his fate to the harsh reform measures, Mr Schroeder stood firm. He argued that the moves were the only way for Germany to overcome slow growth and high unemployment. If the country turned back from painful yet needed changes, it would be without him at the helm.

Surprisingly, the strategy worked. 'It was a rather rough year for the government, but it appears as if Schroeder has turned things around,' said Bernhard Wessels, a political analyst at the Social Science Research Centre in Berlin.

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A number of missteps by the conservative Christian Democrats helped. And by reluctantly giving up his position as chair of the SPD, Mr Schroeder was able to focus on governing instead of trying to placate the party's left-wingers.

He has also benefited from not buckling under the pressure of the mass demonstrations, which has led to a grudging acceptance for his reform course.

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