EU’s economic powerhouse adds $13bn in emergency cash to middle-income labour reforms introduced by Angela Merkel
Germany is giving nearly two million workers a 25% pay rise
Germany said on Thursday it would add €13bn (£11.3bn) in emergency cash to middle-income labour reforms introduced by Angela Merkel in 2013 as part of efforts to boost stagnant wages.
The European Union’s economic powerhouse had previously earmarked €12bn for fiscal relief for workers, but the extra €1bn has been earmarked for the 2018 budget year which began this month.
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Berlin’s Social Democrats (SPD), junior partners in the ruling coalition, welcomed the additional cash as part of “a social development package which would benefit all German citizens”.
The Social Democrats said they would continue efforts to push for higher wages.
The 2013 labour reforms, which sought to expand job opportunities for less skilled workers and upgrade the skills of older staff, boosted the pay packages of the lowest earners while earning the ire of hard-up wage-earners in the unions.
Merkel’s conservative government is debating whether to make concessions to the SPD to cement a “grand coalition” after a national election last September.
With a new election due in 2021, SPD chief Martin Schulz is determined to win concessions from Merkel, but has threatened to force his party into a ballot on the issue after just four months in government.
In the process, Schulz is trying to avoid a repeat of the collapse of Merkel’s last “grand coalition” in 2013, after his party repeatedly rejected draft labour reforms Merkel had hoped to push through in collaboration with SPD partner, the Greens.