SPD puts minimum wage obstacle in way of German coalition

Germany’s opposition Social Democrats have thrown up a new potential obstacle to a “grand coalition” government with chancellor Angela Merkel ahead of a new round of talks, saying they would insist on a national minimum wage.

Mrs Merkel's Christian Democrats have opposed a national minimum wage, and are strictly against tax increases. Picture: Getty

Mrs Merkel’s conservatives defeated her centre-left rivals in the 22 September election, but she needs either the SPD or the Greens as a coalition partner and neither party has shown much desire to join her.

The possibility that talks could take months worries Germany’s European partners, who fear it could delay decisions on measures to fight the eurozone crisis. The SPD is seen as Mrs Merkel’s most likely ally – in a revival of the right-left coalition that ruled from 2005 to 2009 – and she is due to hold a second round of exploratory talks with the party today.

She is expected to present detailed offers at the talks, deputy SPD leader Andrea Nahles said yesterday.

“There will be no government with the SPD unless there is a deal for a national minimum wage of €8.50 per hour,” the left-leaning Ms Nahles told the Bild am Sonntag newspaper. “I expect more concrete commitments from her at this meeting, not just on the minimum wage.”

The SPD, which called for a minimum wage and higher income taxes in its campaign, suffered a drubbing at the polls.

Although the party has quietly backed away from its insistence on a tax hike, Ms Nahles said members would not accept a coalition deal without a minimum wage. With no minimum wage in Germany, some employers pay as little as €3 per hour.

Mrs Merkel’s Christian Democrats have opposed a national minimum wage, and are strictly against tax increases.

The chancellor’s party did not respond to Ms Nahles’ comments yesterday.

The once proud SPD, in disarray after seeing its support plunge to 25.7 per cent from 40.9 per cent in 1998, is wary about joining forces with Mrs Merkel again after seeing her get most of the credit for the performance of their last coalition.

Rank-and-file supporters would have the final say on whether to join a coalition in an unprecedented referendum that the SPD has promised to hold among its 472,000 members.

Mrs Merkel will need a government with broad enough public backing to tackle the eurozone’s banking and debt problems. She could expect to make compromises with either the SPD or Greens on higher taxes on the rich, the minimum wage and infrastructure investment for Europe’s biggest economy.

By keeping the option of a coalition with the Greens open, Mrs Merkel has potentially strengthened her hand in talks with the SPD.

Finance minister Wolfgang Schaeuble said at the weekend he expected it to become clear in the coming week who would be the conservatives’ favoured coalition partner.

“I believe it will go more quickly than you think. I believe we will have a new government by about the middle of November,” he said.