left coalition in the lower house. Schroeder has been forced into action after German unemployment last month rose to 5.2 million - the highest since the 1930s. In some economically hard hit parts of former communist east Germany the rate is a grim 30 per cent. In a bid to stimulate hiring, the Chancellor used a speech to parliament earlier Thursday to propose trimming corporate income tax to 19 per cent from 25 per cent. Business leaders have been calling for a reduction of at least 10 percentage points from their overall tax burden, which is about 39 per cent after other taxes are added on. Both Merkel and Stoiber said they backed Schroeder's tax cut as long as it does not mean running up new state debts. But major differences between the government and opposition remain in key structural areas, Schroeder confirmed. --More 2349 Local Time 2049 GMT
