He appointed a reform commission, headed by Peter Hartz, the head of personnel at Volkswagen.

FORBES: Why Obama Cannot Match Germany's Jobs Miracle

At first his new government had appeared to be watering down the proposals of Peter Hartz, a Volkswagen manager, to make the labour market more efficient.

ECONOMIST: Reform in Germany

The proposals for labour-market reform put forward in the summer at the government's suggestion by Peter Hartz, a senior Volkswagen man, are a test of the new government's determination to enact painful structural reforms.

ECONOMIST: Germany's trade unions