EMPLOYMENT : DEBATE OVER MINIMUM WAGE RAGES IN GERMANY.

Germany is one of the last European countries not to have established a general minimum wage, and there is currently high controversy in the country following the conclusion of an agreement in the postal sector. Some of the competitors of the public operator, Deutsche Post, have threatened to abandon expansion plans (the Dutch TNT), or even lay off staff (Pin Group, a subsidiary of Axel Springer). For them, the creation of a minimum salary on 1 January 2008 will destroy the liberalisation of the postal market and is an act of unfair competition. This measure was also negatively viewed by the President of the European Central Bank, Jean-Claude Trichet: a"Setting minimum wages at levels which are not in line with productivity reduces the employment chances of less skilled workers and of the unemployed," he said during a conference in Berlin, as reported by the Financial Times. This attitude has been criticised by the Minister of Labour and Social Affairs, Olaf Scholz (SPD), in an interview with the Frankfurter Allgemeine Sonntagszeitung. "If an increase of two euro per hour prevents an entire economic model from working, then [ ] this model rests on salary dumping. If dismissals take place, I hope that several employees will put up a fight before the court".

The CDU-SPD coalition government is maintaining its strategy: widening branch by branch an exceptional provision (the law transposing the Posting of Workers Directive), which allows a minimum wage to be created in "sectors particularly...