Another U-Turn: Merkel Responds to Euro Crisis by Shifting Left

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Chancellor Angela Merkel has performed another big U-turn by calling for a minimum wage, which she had opposed until now. She is sharpening her party's social profile in response to the euro crisis -- and, possibly, to secure her power by preparing another 'grand coalition' with the Social Democrats.

New friends: Angela Merkel with the head of Germany's DGB trade union federation, Michael Sommer. Organized labor are pleased with the chancellor's U-turn on minimum wages. Zoom
DPA

New friends: Angela Merkel with the head of Germany's DGB trade union federation, Michael Sommer. Organized labor are pleased with the chancellor's U-turn on minimum wages.

Angela Merkel has a reputation for playing the long game. But the German chancellor is no stranger to U-turns either, if it serves her political goals. There are some striking examples of Merkel vacating positions that had long been core to the agenda of her conservative Christian Democratic Union (CDU) party.

Mandatory military service, that bedrock of CDU policy for decades? Merkel ditched it last year. Nuclear power? She arranged for an early exit just months after extending the lifetimes of reactors. The three-tiered system of secondary schools? A thing of the past.

And now it's the turn of social policy. At its party congress in November, the CDU plans to pass a motion that has long been the exclusive domain of the left-wing opposition parties: a minimum wage.

The CDU doesn't want the level to be set by the government, but it plans to seek a mandatory wage agreed by employers and trade unions in sectors that don't yet have a minimum wage. The lowest hourly pay rate is to be similar to the level that currently applies for temporary work: €7.79 ($10.92) in western Germany and €6.89 ($9.65) per hour in the east.

The new approach fits in with Merkel's drive to sharpen the CDU's social profile in response to the euro crisis , which has triggered a wave of public anger at the financial industry and concern that ordinary taxpayers are being made to foot the bill for profligate high-debt euro member states.

Together with Labor Minister Ursula von der Leyen, and much to the annoyance of the center-left Social Democrats, Merkel has been wooing voters with decidedly leftist policies of late. Von der Leyen plans to give pensioners a financial boost to combat old-age poverty, she has taken on discount supermarkets that exploit temporary staff and has criticized German companies for resisting her plans for a minimum quota of women on company boards.

"The question is no longer whether we're going to have a minimum wage but how one negotiates the right level," von der Leyen said in a recent interview with the Süddeutsche Zeitung newspaper published on Monday. It sounded like she had been taking lessons from SPD leader Sigmar Gabriel.

Applause From Trade Unions

The trade unions are predictably elated by Merkel's leftward shift. A general minimum wage had been expressly ruled out in the coalition agreement reached between her conservatives and their junior partner, the pro-business Free Democratic Party (FDP), after the 2009 election.

There is a lot of skepticism about the plan both within her own conservative ranks and in the FDP. Many representatives of the pro-business arm of the CDU regard minimum wages as bad for corporate competitiveness.

The about-face has its risks. It begs the question why the CDU is now backing a policy it fiercely opposed for so long. And with every U-turn, Merkel runs a greater risk of being seen even in her own party as a power politician without a solid ideological foundation.

Many in her party will feel even more alienated by the minimum wage move, which comes after her sudden decision to quit nuclear power in March -- after the Fukushima accident.

But Merkel seems oblivious to such risks. Social policy is one of the last big areas in which the CDU and SPD still have clear differences. The issue could have been dangerous for the CDU in the run-up to the 2013 election if Merkel hadn't decided to embrace it.

It puts the opposition in an awkward position. It can't criticize the measure in itself, but it can't praise Merkel either. "Better late than never," SPD General Secretary Andrea Nahles said. "Gradually even the CDU has realized that the general minimum wage is inevitable."

The co-leader of the opposition Greens, Cem Özdemir, said: "It is high time that the CDU at last gives up its opposition to the minimum wage. It's a central question of justice that people should be able to live off the money they earn."

The new approach is a warning to the FDP. Merkel knows that the minimum wage is just about the last thing the FDP wants to push through in the final two years of the center-right government's term.

The fact that she is so ready to ignore the FDP is a measure of the low esteem in which she holds the party, which has suffered a dramatic slump in opinion polls and can't be relied on as a viable coalition partner to secure Merkel a third term as chancellor after the 2013 election.

The FDP is caught in a trap -- if it blocks the minimum wage, it will drive Merkel into the arms of the SPD. It's clear that there's one less obstacle now to a repeat of the "grand coalition" alliance of CDU and SPD that governed Germany from 2005 until 2009.

So perhaps Merkel is playing the long game after all.

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