German Chancellor Gerhard Schroeder faced whistling, heckling and booing trade unionists opposed to his economic reforms on Wednesday as he appealed for support before a key parliamentary vote on Friday.

Fresh from quelling a rebellion in his party, Schroeder told a congress of the IG Metall engineering union that Germany had no alternative to cutting back the welfare system to revive its ailing economy.

Schroeder has alienated leftwingers in his Social Democrats and the party's traditional trade union allies with the plans, which include jobless benefit cuts and measures to force the unemployed to take on low-paid work they are overqualified for.

"I have come here to make clear that we need change in our society," Schroeder told union members.

Germany's economic lead over other nations was shrinking and it could no longer afford its generous welfare state, he said.

"We have allowed a mentality to arise in this country, where people insist on getting out of the welfare state what they paid into it. That was never the purpose of the system," Schroeder said to occasional barrages of whistles and heckling.

He said money raised from reforms would be used for badly needed research and development programmes, better childcare provisions and education.

IG Metall members listening to the chancellor's speech held up a banners reading: "Gerhard Schroeder: Killer of the social state and the SPD" and "These policies don't deserve applause".

UNION ANGER

The union has criticised many of Schroeder's planned economic reforms as too harsh and has warned they threaten the traditional bond between trade unions and the SPD. Around three quarters of SPD deputies are union members, including Schroeder.

Juergen Peters, chairman of the 2.6 million member IG Metall union, said the chancellor's plans to streamline jobless benefits were too tough on the unemployed. "The whole direction is wrong," he told German television this week.

Tens of thousands of union members marched in rallies across Germany in May to protest against the reforms saying they would fight Schroeder's proposals with hefty wage claims.

But many see dwindling membership and a damaging internal row at IG Metall as proof unions lack the power to sway policy.

"The image of the unions has really suffered recently. They have become an object of popular scorn. Their demands just don't get popular support anymore," said Dieter Roth, director of the Electoral Research Group polling unit.

Schroeder has threatened repeatedly to resign unless he gets backing from his coalition in parliamentary votes on the reform.

Rebel SPD deputies backed down on Tuesday after modest amendments to rules to cut jobless benefit and to force the long-term unemployed to take up low-paid jobs.

Seeking to reassure the unions, Schroeder said he would defend Germany's collective wage bargaining system, which has been in doubt after pressure from the conservative opposition to relax regulations and give employers more negotiating power.

"We should work together to ensure the bargaining parties can find a balance between collective bargaining power, which must not be destroyed, and company-level possibilities," said Schroeder.

IG Metall's next wage round starts in December.

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