Angela Merkel’s CDU-CSU and the centre-left SPD party have confirmed that they are going to enter into official negotiations, with an aim to forming a ‘grand coalition’.
A coalition with the SPD is the only real alternative for the German chancellor, as the environmentalist Greens ended exploratory talks with her CDU-CSU party on Wednesday.
Both parties are due to vote on the coalition by next Wednesday, with the main item on people’s minds expected to be the ongoing issue of the minimum wage.
Each region currently sets their own minimum wages according to sector, which is a system Merkel is keen to continue. However, the SPD wishes to fix the minimum wage at €8.50 per hour nationwide, and has made this a key coalition demand.
Just under a tenth of workers in western Germany earn less than the proposed minimum wage.
However, some fear that fixing the wage will cause significant job losses in the east of the country. As wages in neighbouring eastern countries – such as Poland and the Czech Republic- are so low, there is a real concern that companies may move their operations across the border to keep labour costs down.