Bipartisan Conflict Waging War Over Work

A spat over the new minimum wage has poisoned the mood in Chancellor Angela Merkel’s right-left coalition, threatening to paralyze Germany’s government.
Sigmar Gabriel and Angela Merkel: is their political marriage on the rocks?

After fighting for months to secure Germany's new national minimum wage, Labor Minister Andrea Nahles probably didn’t expect a backlash within days of it becoming law on 1 January.

But that's what happened. No sooner had two studies been released predicting that the wage would increase the black market economy, the minister, a member of the Social Democrats, the junior coalition partner, had to endure an attack from a coalition partner.

“This bureaucracy has to go,” said Horst Seehofer, the leader of the Christian Social Union, the Bavarian sister party of Chancellor Angela Merkel’s ruling Christian Democratic Union.

Mr. Seehofer said he would take up the “bureaucratic insanity” caused by the new minimum wage with Ms. Merkel, adding to the long list of contentious issues weighing on her grand coalition of the CDU/CSU and Social Democrats.

The mood has become poisoned within Ms. Merkel's awkward right-left alliance.

Whether minimum wage, strike law or pension policy, the mood has become poisoned within her awkward right-left alliance.

The coalition members haven’t yet started calling each other "pigs" and "clowns" as they did during Ms. Merkel’s last coalition with the pro-market Free Democrats.

But the CDU/CSU parliamentary group last week voted unanimously to support proposed changes to the minimum wage law, which was passed by both coalition partners just a few months ago.

Carola Reimann, the Social Democrat (SPD) deputy leader in parliament, called the move a “remarkable state of affairs” that was unnecessarily causing insecurity within the government.

Conservative MPs naturally see things differently, with one expressing concern that they would “be held responsible” by their constituents for the difficulties implementing the new wage, which is set at €8.50 ($9) an hour.

Chancellor Merkel and SPD leader Sigmar Gabriel, who is also vice chancellor and economy minister, are trying to de-escalate the situation. A conservative parliamentary source said there were talks being held on the issue.

But no sooner did Ms. Nahles agree to consider changes to the minimum wage law, along came another coalition kerfuffle sparked by an SPD immigration proposal.

The conservatives’ parliamentary whip Michael Grosse-Brömer quickly tried to kill it off before it could get any traction: “We have an excellent immigration law.”

He fears that the disharmony in the government could soon spill over to the Bundesrat, which represents the country’s 16 federal states and acts as a sort of upper house of parliament, akin to the U.S. Senate.

The current distrust within the grand coalition bodes ill for the government’s last few years in office.

This would come at a bad time as on Friday the Bundesrat will debate such contentious topics as quotas for women executives, wage policy, asylum for refugees and the CSU’s controversial plan for a toll for foreigners driving on German roads.

Most of the states have expressed “considerable concern” about the toll project, which is why some members of the coalition fear that the SPD could seek to torpedo it in revenge for conservative attacks on the minimum wage.

Mr. Grosse-Brömer called on SPD state leaders not to sabotage the federal government, but one Social Democrat flatly rejected that: “Fidelity to the coalition is something for the federal party.”

SPD deputy leader Mrs. Reimann said the current distrust within the grand coalition did not bode well for the government’s last few years in office.

The two sides are already fighting over how much to raise Germany’s child benefit and Family Minister Manuela Schwesig from the SPD has raised conservative hackles by planning legislation to close the pay gap between men and women. Other contentious issues include the ongoing transition to renewable energy and rent control efforts.

And conservative MPs are already mobilizing against Ms. Nahles’ next project: the misuse of factory-specific contracts to undermine wage and labor standards.

“Factory contracts and temporary work are important instruments that cannot be ruined by new regulation,” warned CDU parliamentary Carsten Linnemann, in a taste of the coalition clash to come.


The authors are Handelsblatt correspondents in Berlin. To contact the authors: [email protected] and [email protected]