218 WINFRIED SÜß
a real structural break because private elements have always played a
certain role in fi nancing and providing social benefi ts in the German wel-
fare state. The introduction of the compulsory long-term care insurance
in 1994 institutionalized the fi nancing of this system along the traditional
lines of social security, but it also consciously made space for private
providers to off er nursing care services within a state-regulated welfare
market. Marketization trends are even more apparent in the health care
system, where municipalities have given up much of their traditional role
as hospital providers to profi t-oriented clinic companies. That said, how-
ever, this marketization has not necessarily strengthened the position of
private providers because the newly created welfare markets in Germany
tend to be strictly regulated.^63 In some areas, the scope of autonomy af-
forded private actors has actually been reduced—for example, by turning
the traditionally fi ne-lined system of regional public health insurance pro-
viders into a de facto single-provider insurance system off ering compre-
hensive social protection to the detriment of private practice doctors and
private insurance providers.
- Security loss and deregulation. With the partial privatization of pen-
sion schemes through the “Riester reform” of 2002, an interest-based
coalition, led by fi nancial service providers as well as some of the unions
and Green party politicians, did away with the idea that the main purpose
of the public pension fund was to ensure standards of living, in favor of
keeping the contributions to the system at a stable rate. The goal was to
prepare the pension fund for the drop in the number of people paying
into the system that was predicted to result from the major demographic
shift in progress.^64 In order to achieve this, benefi ts were cut down to
such an extent that future pensioners can no longer count on being able
to maintain their previous standard of living. The ensuing gap was sup-
posed to be fi lled by supplemental private pension schemes off ering tax
incentives, but it was virtually impossible for employees in low-income
brackets with an unsteady employment history to pay into this system.
Consequently, the danger of poverty in old age, which had basically dis-
appeared from the spectrum of sociopolitical problems in West Germany
after the pension reforms of 1957 and 1972, has returned to haunt the
future prospects for old age in post-reunifi cation Germany.
Job market policy was the second major fi eld of deregulation in social
policy alongside the pension system. In light of persistent mass unem-
ployment, the Red-Green coalition, supported by the Bundesrat domi-
nated by the CDU, introduced a series of reforms that were stylized as a
break with the tradition of a welfare state whose primary aim was security.
They marked a move toward a social policy agenda with a focus on the
labor market that resembled the “New Labour” approach practiced in the