GERMANY – Germany’s new president, Horst Köhler, has said that Germany has failed to adapt the welfare state to deal with population ageing.

“We have not succeeded in adapting the welfare state to the conditions of an ageing society and a changed workplace," Köhler said in his inaugural speech to a joint session of parliament after taking the oath of office yesterday. He has a five-year term.

Köhler, former managing director of the International Monetary Fund, said: "Germany needs a new departure in its own best interests." He called upon the government to be more persistent in pursuing Agenda 2010 reforms.

"Agenda 2010 points in the right direction. What we need now is discipline and constancy in continuing on this path."

"The government needs to have the courage to undertake initiatives that systematically pursue the path of renewal while the opposition needs to have the courage to present its alternatives clearly and comprehensively."

According to the German government press service, Köhler said the purpose of the Agenda 2010 reform program was to reform the welfare state and to preserve its principles.

The key objectives were growth, stable pensions, lower health care costs, better education, lower taxes and thus more disposable income, as well as more money for investments in research.

The German parliament legislation relating to Agenda 2010 in December 2003, it said, adding that they are showing “initial results.

The Financial Times quoted former chancellor Helmut Schmidt as saying Köhler had more understanding of economic issues than the entire German political class put together.