German government, opposition fail to reach welfare deal

Feb 9, 2011, 3:07 GMT

Berlin - The German government and opposition were unable to reach a compromise over benefit payments for the long-term unemployed after meeting for five hours, according to sources close to the negotiations early Wednesday.

Political factions have held long negotiating sessions for days, including a nearly 10-hour round of talks overnight Sunday into early Monday and the latest on Tuesday night.

The main point of contention is how much the so-called Hartz IV payments should increase.

The negotations were called after a previous deal on the payments was rebuffed in the Bundesrat, the upper chamber of parliament.

The negotiations are a test of strength for Chancellor Angela Merkel, whose coalition of the Christian Union and Free Democrats last year lost its majority in the Bundesrat.

Merkel's government has proposed increasing the monthly Hartz IV payments by 5 euros to a total of 364 euros (495 dollars) monthly on top of rent, heating and social contributions - an amount that the opposition Social Democrats argued is too miserly.

The centre-right coalition argued that greater unemployment pay reduces the incentive to find work, estimating that a salary of more than 1,200 euros monthly would be necessary for individuals to be better off in work than on welfare benefits.

The need for change was brought about by a constitutional court ruling a year ago that the current Hartz IV payments to 4.7 million adult welfare recipients were not calculated in a transparent manner.

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