GERMANY:Germany's grand coalition government has come under fire for agreeing only modest reforms of minimum wage laws.
The country is one of the few EU members without an across-the-board minimum wage. However, plans by the Social Democrats (SPD) to change that prompted an ideological war with its Christian Democrat (CDU) coalition partners.
After a late-night haggling session, Chancellor Merkel announced a wage fudge yesterday.
The government will not introduce an across-the-board law - a win for the CDU which dubs minimum wages a "jobs killer". Instead the government will extend existing sector-specific minimum wage laws that already apply to building workers and contract cleaners.
"We have found a good solution without introducing an overall, exhaustive minimum wage which would destroy more jobs than it created," said CDU parliamentary leader Volker Kauder.
The deal is a serious disappointment for the SPD. Trailing 10 points behind the CDU in the polls, it badly needed a policy success. Leaders had high hopes in backing a trade union campaign for a €7.50 minimum hourly wage.
The campaign has gathered momentum after press reports of "wage-dumping" where slaughterhouse employees subcontracted from Slovakia earn €3.50 and hour and eastern German hairdressers earn €3.80.
"The lesson is, one cannot push through a minimum wage with the CDU," said SPD labour minister Franz Müntefering.
After just over 18 months in office, Mr Müntefering became the first SPD minister to hint that he was getting tired of the government's lowest common denominator deals.
"The minimum wage issue won't go away," he said, adding that he was "prepared to play his part" in making it law "against the CDU".
SPD leaders have vowed to make the minimum wage a central plank of their next general election campaign to defend its left-wing flank from the newly-formed political party, the Left.
A spokesman for the Left said the compromise was "like a handful of life jackets tossed to the shipwrecked millions on 'hunger' wages".
The liberal Free Democrats called the deal "typical grand coalition wishy-washy".
The harshest criticism came from trade union leaders who attacked the compromise as a "consolatory sticking plaster" to 2.5 million low-wage workers.
"Whoever wants to help people who are poor in spite of working doesn't need to create a bureaucratic monster . . . just secure a minimum hourly wage of €7.50," said Margaret Mönig-Raane, deputy chairwoman of the Verdi services union.