Merkel gives wary backing to wage demands

13th June 2005, Comments 0 comments

13 June 2005, BERLIN - Angela Merkel, the opposition candidate challenging Chancellor Gerhard Schroeder in Germany's autumn general election, on Monday gave wary backing to government calls for big wage increases.

13 June 2005

BERLIN - Angela Merkel, the opposition candidate challenging Chancellor Gerhard Schroeder in Germany's autumn general election, on Monday gave wary backing to government calls for big wage increases.

"Naturally wage agreements must be made in light of the economic situation of respective companies," said Merkel, who nevertheless criticised the government for getting involved in an issue which she stressed was better left to labour and business leaders.

Merkel said there could not be a one-size-fits all approach and that recent wage increases which were justified in the booming steel sector would not make sense in other struggling sectors.

Ministers in Chancellor Gerhard Schroeder's Social Democrat- led German government called at the weekend for boosting pay in order to increase domestic consumer demand which has been weak in Germany for years.

Economics Minister Wolfgang Clement, who was earlier known for his criticism of high union wage demands, altered his stance for the first time and Finance Minister Hans Eichel said he favoured better pay deals, at least in sectors where profits were strong.

The move comes as Germany's economic growth is being projected at slipping to just over 1 percent this year.

Chancellor Schroeder, who last month called for early national elections, badly trails Merkel in all opinion polls in the run-up to the expected 18 September national vote.

Schroeder's SPD-Greens government is currently at 37 percent, compared with 51 percent for Merkel's Christian Democrat alliance (CDU/CSU) and its Free Democrat (FDP) ally, according to a ZDF TV poll.

Business leaders have attacked the government's call for big wage increases.

"Moving away from moderate wage policies is irresponsible," said Ludwig Georg Braun, head of the German Chamber of Industry and Commerce (DIHK).

Braun said surveys showed businesses planned to eliminate 200,000 jobs in Germany this year.

"Those who in this situation want to ratchet up wage costs will destroy more jobs," said Braun.

Unemployment is the biggest political millstone hanging on Schroeder's neck given the current near post-war record of 4.8 million jobless in Germany or 11.6 percent of the workforce.

DPA

Subject: German news

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