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Germany - U-turn on nationwide minimum wage

14 November 2011

Just in time for today's Party Conference, top politicians of Angela Merkel's Conservative Party (CDU/CSU) have agreed to propose the introduction of a nationally binding minimum wage to both the conference and their smaller Free Democrat coalition partner (FDP).

Traditionally, Germany does not have a nationally binding minimum wage due to the widely held view that minimum wages should be negotiated on a sector-by-sector basis between employers and unions and that the government must not interfere.

However, the leadership of the Conservative Party has now decided to propose that a sub-committee should be in charge of establishing the level of a new minimum wage for the whole country.

In recent weeks, Employment Minister Ursula von der Leyen had argued that the new nationwide minimum wage should be based on the recently introduced minimum wage for agency temporary employees and that regional or sector-by-sector differences should be kept to a minimum.

Chancellor (Prime Minister) Angela Merkel, on the other hand, believes that regional and sector-by-sector differences are of fundamental importance in order to protect employment levels in the country.

Merkel told German television channel ARD "I expect that the large majority of conference participants will vote in favour of the minimum wage.

The Labour Minister defended her Party's U-turn on the introduction of a minimum wage. She told news magazine Der Spiegel "the world has changed noticeably and a party must be able to deal with changes."

On the question of how the Conservatives will convince their Free Democrat coalition partners, who are strongly opposed to a minimum wage, von der Leyen said "the Free Democrats have already agreed to a minimum wage for agency temporary employees, a minimum wage for carers and they have also agreed to extend minimum wages in other sectors. This has created a bridge we can both cross together now."

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