Chancellor Angela Merkel's government failed to reach a deal on welfare reforms with the opposition in marathon talks early today, putting the measure in doubt ahead of a parliament vote on Friday.
Ms Merkel's centre-right coalition needs opposition backing after losing control of the Bundesrat, the upper house of parliament, last year. The coalition now hopes the upper house will pass the welfare reform measure on Friday anyway.
The leader in the talks for the opposition Social Democrats, Manuela Schwesig, blamed Ms Merkel for their collapse after seven weeks, saying she felt the chancellor had instructed her party allies to "let the negotiations fail".
But Labour minister Ursula von der Leyen, who led the coalition side, said it was pointless for each side to blame the other. She said she hoped the Bundesrat would pass the measure on Friday even though the coalition does not have a majority.
The government wants to raise welfare payments for 4.7 million jobless and under-employed people to €364 a month, in response to a constitutional court ruling last year forcing it to change the way minimum welfare payments are calculated.
The opposition SPD and Greens want a more generous increase in benefits than the €5 a month the government proposes.
The government hopes one of the states in the upper house, in which the SPD and Greens hold seats, might be tempted to vote for the measure. As part of the reform, communities would receive some 12 billion euros in aid over the next five years.
Ms Merkel lost control of the Bundesrat after failing to hold onto North Rhine-Westphalia state last May. Ms Merkel is pinning her hopes on Saarland where her coalition of conservatives and liberal Free Democrats govern in coalition with the Greens.
The so-called "Hartz IV" welfare rules were introduced by Social Democrat (SPD) chancellor Gerhard Schroeder in 2005.
Reuters