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French minister slams Germany’s ‘unfair’ wages

A French economy minister has launched a scathing attack on Germany’s ‘unfair’ wage policy “which is based on who can pay workers the least”. The attack was timed just days before the Germans goes to the polls.

French minister slams Germany's 'unfair' wages
A French minister has attacked German wage policy for being unfair. Photo: Odd Anderson/AFP

France’s consumer affairs minister Benoît Hamon has slammed Germany’s policy of keeping pay artificially low for being “unfair” on France.

Speaking to the BBC on a visit to an Optic 2000 factory, which creates eyewear in France, Hamon said “some countries in Europe are getting around employment directives and underpaying their workers.”

Hamon lamented Germany’s wage policy, which has helped keep the cost of German products down compared to “Made in France” goods.

"I want Germany to have a social policy where competitiveness doesn't rely on jobs paying €400 [£336; $534] a month," he said.

"I want Germany not to base its agricultural economy on salaries of seven euros an hour. That's what I want from the next German government.

"I want it to play fair with an economic model that isn't based on a competition for who can pay workers the least.

"We are pitting workers at seven euros against those who earn 10, 11 or 14 an hour. That can't work within the same territory. It's not possible. It can't work," Hamon said.

France is struggling to kick-start its economy and the Socialist government has made a big push to promote the “Made in France” brand to try to boost its manufacturing industry.

But the high cost of wages compared to its neighbours on the other side of the Rhine river means France has lost its competitive edge to Berlin in recent years.

Hamon does have a history of launching barbs at Germany. Earlier this year, he targeted Chancellor Angela Merkel, claiming her austerity policy had failed.

Thomas Klau from the European Council on Foreign Relations in Paris told The Local that Hamon does have a fair point when it comes to wage policies.

“There are examples in certain industries where low wages have helped give German firms an advantage over French ones, such as abattoirs.

“They have paid mainly temporary migrants from Eastern Europe €5 an hour to work and live in conditions of extreme poverty. But under French law, abattoirs are not allowed to pay such miserly wages, which has helped the ones in Germany to flourish.

“In an area like the Eurozone the wage policies of each country can have a heavy impact in other countries.

“This means the agreement that member states are free to compete with each other is often a race to the bottom, where working conditions, for example, are not compatible with the kind of Europe we want," Klau said.

With Germany facing elections on Sunday and current Chancellor Angela Merkel’s main opponent Peer Steinbrueck vowing to introduce a statutory, national minimum wage, Hamon’s attack appears perfectly timed.

“The political landscape in Germany may be very different after Sunday,” said Klau.

For all the latest news on the German elections visit our sister site The Local Germany.

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INDUSTRY & TRADE

After promising to create 1,000 jobs in France… GE set to cut 1,044

US industrial conglomerate General Electric said on Tuesday that it would cut more than 1,000 jobs, mainly at its gas turbine operations in eastern France, part of a wave of European layoffs as it tries to stem losses in its power generation business.

After promising to create 1,000 jobs in France... GE set to cut 1,044
Photo: AFP
The 1,044 job cuts, long feared by unions, could become a political challenge for President Emmanuel Macron, who assured local officials this month that the government was following the matter with “the utmost vigilance”.
   
The cuts will be made mainly in Belfort, eastern France, the European headquarters for GE Energy, and in the Paris region, the company said in a statement.
   
“More than half the number of employees in the gas activities… are going to lose their jobs,” the mayor of Belfort, Damien Meslot, and other local officials said in a statement.
   
They warned of “a new hardship” for the region, which has been hit hard by the decline of mining and heavy industry over the past decades.
 
READ ALSO:

US giant GE to pay France €50 million after creating just 25 jobs out of 1,000Photo: AFP

Overall, GE employs nearly 4,000 people in Belfort, including 1,900 in its gas turbine operations.   

The company has struggled for years with slumping demand for its gas turbines because of low oil and gas prices, and the power operations were a key factor in its massive annual loss of $22.8 billion last year.
   
In 2015 GE announced 6,500 job cuts across Europe, and two years later it revealed a further 12,000 cuts.
 
That prompted France to fine the company €50 million earlier this year, since GE had promised to create at least 1,000 new jobs when it announced the purchase of the power businesses from France's Alstom in 2014.
 
Shortly after closing that deal, GE unveiled a series of job cuts across Europe as slumping oil and gas prices crimped demand for its heavy-duty turbines and other equipment.
 
The company had already warned last year that it wouldn't meet the target, though the new CEO Larry Culp confirmed in October that GE would “fulfil its commitments.”
 
It had promised to pay €50,000 for every job not created over the three-year period.
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