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Economists warn Germany against introducing minimum wage

The German government's independent council of economic advisers is warning against a national minimum wage, saying it could harm economic growth



BERLIN—The German government’s independent council of economic advisers is warning against a proposal to introduce a national minimum wage, saying it could harm economic growth.

The expert panel is also criticizing as “backward-looking” proposals to cap rent increases and boost pensions that are part of coalition talks between Chancellor Angela Merkel’s conservative bloc and the centre-left Social Democrats.

The Social Democrats have made clear that introducing a minimum wage is essential for their participation in government.

The panel released its annual report to the government Wednesday, in which it predicted Germany’s gross domestic product would increase by 0.4 per cent this year and 1.6 per cent in 2014.

The government’s own forecast in October was for 0.5 per cent growth in 2012 and 1.7 per cent next year.

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