Germany's SPD backs coalition talks with Merkel, sets terms

BERLIN Sun Oct 20, 2013 2:11pm EDT

Leader of German Social Democratic party (SPD) Sigmar Gabriel addresses the media after a party meeting in Berlin October 20, 2013. REUTERS/Tobias Schwarz

Leader of German Social Democratic party (SPD) Sigmar Gabriel addresses the media after a party meeting in Berlin October 20, 2013.

Credit: Reuters/Tobias Schwarz

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BERLIN (Reuters) - Leaders of Germany's Social Democrats (SPD) won a green light from their party to start coalition talks with Angela Merkel on Sunday, after promising to wring concessions from the chancellor on a minimum wage, equal pay and infrastructure investment.

Discussions between Merkel and the center-left SPD on forming a new government can now begin on Wednesday, a month after an election saw her conservatives emerge as the biggest political force but needing a partner to form a majority.

The SPD's willingness to enter talks comes at a price. The party listed 10 demands it called "non-negotiable", including a minimum wage of 8.50 euros per hour, equal pay for men and women, greater investment in infrastructure and education, and a common strategy to boost euro zone growth.

"We will negotiate hard so that in the end a workable government emerges. Compromises will be necessary. However the party considers the following points non-negotiable," the SPD declaration said, listing a minimum wage in first place.

Merkel's Christian Democrats (CDU) and their Bavarian allies the Christian Social Union (CSU), favor "wage floors" on a regional or sectoral basis, set by employers and unions.

Volker Kauder, head of the CDU's parliamentary group, said he was sure they could reach a deal. Finance Minister Wolfgang Schaeuble said any new regulation must not threaten jobs.

Germany's leading economic institutes warned on Thursday that the introduction of a minimum wage could lead to significant job losses in eastern Germany, where a quarter of workers earn less than the proposed new amount.

The SPD also demanded equal pensions in the former West and East Germany, the ability to have dual citizenship, and measures to make it easier to combine work with family life.

HAGGLING OVER CABINET

Of the 229 senior SPD members to vote, 196 supported the talks, 31 objected and 2 abstained.

"We aim to form a government by Christmas. That should be enough time," SPD Chairman Sigmar Gabriel told reporters.

The parties must thrash out policies and a cabinet line-up. The influential post of finance minister, now held by the CDU's Schaeuble, is one prize. SPD members have refused to say publicly which posts they want, but media reports say they may seek at least six portfolios in the 15-member cabinet.

"In a difficult time for Europe we need the best person there is. Wolfgang Schaeuble is the best finance minister I can see out there," Kauder said.

German voters, international investors and Berlin's European allies have mostly been expecting a "grand coalition" between the CDU/CSU and SPD, and few expect any partnership deal to greatly alter Merkel's domestic and foreign policy agenda.

No mention is made in the SPD document of tax increases for the wealthiest, for which the SPD had campaigned during September's election but which the chancellor has ruled out.

The SPD wants to avoid a rerun of its 2005-2009 coalition with Merkel, from which it emerged with its worst election result since World War Two. Disgruntled SPD members protested outside the party's Berlin headquarters during Sunday's meeting.

A grand coalition would enjoy an overwhelming majority in the Bundestag, the lower house of parliament, and find it easier to push legislation through the Bundesrat, the upper house where the governments of Germany's 16 federal states are represented.

Such a union began to appear all but inevitable after Merkel's exploratory talks with the environmentalist Greens broke down last week, strengthening the SPD's hand.

The SPD will seek final approval of any coalition pact in a poll of its some 472,00 grassroots members.

(Writing by Alexandra Hudson; Editing by Alistair Lyon)

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Comments (3)
ExDemocrat wrote:
The SPD sounds more sensible than their U.S. counterparts, the Democrats. However, their demand that the minimum wage be increased, will result in the cost of labor being increased. Unless there is enough unemployment, this will result in more people with fewer hours, and/or jobs. The SPD should either consider joining with Ms. Merkel, or letting her know that they will try to work with her, if she must have a minority government. It would be highly desirable if the poor U.S. Democrats were as wise as the Germans’ SPD.

Oct 20, 2013 1:24am EDT  --  Report as abuse
Rhino1 wrote:
@ ExDemocrat:

Just for your information: most Germans are great fans of Obama and the Democrats. Most Germans think that Obama’s and the democrats’ approach to the social agenda comes closest to the German model of a social market economy.
The reason the US is in such a dilemma now is because governments have been serving the interests of the 1%, and the 1% only, for about a hundred years now. Read the article below. It sheds some light on economic differences between Germany and the US. To compare the two is almost impossible.

http://www.forbes.com/sites/eamonnfingleton/2013/09/22/main-gott-what-germany-inc-can-teach-america-about-economics/?partner=yahootix

Oct 20, 2013 5:05am EDT  --  Report as abuse
Capataz wrote:
@EXDemocrat

Rhino is right you can’t compare both it’s not possible. While the ground structure is setup with american’s during FDR with sadly not implemneting the 2nd bill of rights for the american population. See it from the ground to top. The German’s dont really have a upper 1%. There is instant a public outcry if a German Manager would make 100th of millions. Best example take there Martin Winterkorn he leads VW which is on highly profitable, but even he knows how sensible the population is so settelt with 30 million Euro as his pay and denied himself 2012 a higher pay even if revenue’s were good.
Next to they see it as human right on healthcare that everyone is covert no matter if he can pay it or not. Same goes to schools and universitys you get that for free.
The minimum wage won’t hurt really the labor market, minimalisticly maybe but in the end the tax payer pays it anyway due to even if you get 8,50 (11$ something) you will recieve wellfare on top since you can’t life from that except you have 1 room appartment. (wellfare is called harz IV which means they pay the rent, heating, healthcare, telefone connection (you need to be reachable) and you have 386 euro to spend for what ever you like to take part in sociaty or around 480$ till you reach a income which is considert lifeable with enough money to spend for other things then just lifing). Less hours won’t reall happen either you have your standard 40h contracts and that’s it. Companys can’t force you to overtime which most won’t do accept it’s stated in the contract it’s no reason to lay you off. Overtime mean’s there space for more people ;) And if there is not enough work for period of time the company can annouce short work i.e. you work part time for full pay and the govenment will jump in to prevent layoffs and not take money out of that area to hurt other busnisses who only exists because of that money these people spend.
Next to that us have no protection for females in reguard when they are pregnant they do there you will get 1 year min full mother pay and can return with garantee to your old job. You have the right to a minimum of 21d payed vecation and overall endless sick pay after week 6 the healtcare company has to jump in up to 6 monthes to pay your old income to 75%.
To cut it short in law the company has the responsiblity to the people and country not the stockholders like in the us. Thats the main difference. Just look at a standard german contract by a big company they look a hell of a lot different with a shitload of benefits and most of these companys do well, its just hard for startup, but once they have a decend size its fine.
Another aspect is the country can split up companys as soon as they notice there will be a monopoly building like they did with the German Telekom they forced them to sell there cable tv. US has in comparison a kind of free market that is no longer working, best example for me would be there your internet market its rubbish and expensive. Take me for example can’t get more then 50 Mbit’s more isn’t offered by comcast. In my birth place in germany the slowest is 50mbits and i would pay 25€ for it i pay for 50 in states 150$. The fastest they offer in my birth place is 500M/bit for 129€. It’s because these providers have to compete and subrent there lines to other providers which undercut the prices that’s no longer happening in the states you have 3-4 big once but they don’t really compete they settlet with the area they dominate.
Social is not always bad just needs to be balanced, best way to look at it is check Norway….

Oct 20, 2013 11:44am EDT  --  Report as abuse
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