Brussels for German wage hikes

European Commissioner for Employment, Social Affairs and Inclusion, Laszlo Andor, told Monday's edition of the German daily "Süddeutsche Zeitung" that higher wages were required in Germany to boost demand at home and beyond. The EU executive added Germany's minimum wage system had to be extended to more industries.

"Belgium and France have already complained about German wage dumping," Andor noted.

He said it was not justified for Germany to keep wages so low in the face of a continuously massive export surplus. The commissioner argued debt-stricken eurozone nations had to adapt their policies to get on their feet again, but Germany too needed to make a bigger contribution.

"Otherwise, the euro currency union will drift apart further, with cohesion being weak already," Andor commented.

South on the move soon?

The German central bank for its part said it thought little of raising wages too strongly. The Bundesbank argued wages must not be higher than current productivity levels allowed. Otherwise, companies would cut jobs and trim back investments, it maintained.

In his interview for the "Süddeutsche Zeitung", EU Commissioner Laszlo Andor also threw his weight behind giving struggling eurozone economies such as Spain, Italy or France more time to bring down their public deficits. He said he didn't see how the debt load could possibly be reduced without any growth incentives.

Ando feared that a south-north mass migration within Europe might soon set in, if the economic imbalances on the continent were not removed soon. "And in order to do that, we really need to create more growth in the southern European crisis nations," he said.

hg/dr (Reuters, AFP)