After five and a half hours of talks which ran late into Tuesday night, the government and opposition in Berlin could only agree that the other side was to blame for their failure to agree on welfare reform.

The Christian Democrat labor minister, Ursula von der Leyen, said that the opposition had not been prepared to compromise.

"We've listened to maximum demands for seven weeks," she said as she emerged from the talks. "We took huge steps towards the opposition. I think the opposition simply loaded too much on to the process."

She was referring to the fact that the center-left opposition had insisted on talking, not only about the levels of welfare payments, which was the central issue under discussion, but also about minimum wages for temporary workers, the principle of equal pay for temporary workers and full-time staff doing the same work, the shape of a new "education package" for children in poor families, and a number of other issues.

Enforced reform

The reform became necessary after the Constitutional Court ruled in February 2010 that the existing welfare payments, known as Hartz IV, were not properly calculated. It set a deadline of the end of last year for payments to be made on a new basis.

That deadline was missed after the government could not get the agreement of the opposition on its proposals, which would see the rates go up by five euros ($6.80) a month for a single person to 364 euros on top of rent, heating and health insurance.

The opposition says this level of payment is also likely to be thrown out by the court; they want to see a further six euros added to the increase.

The opposition's chief negotiator, the Social Democrat Manuela Schwesig, was scathing about the role Chancellor Angela Merkel had played.

No majority

"The chancellor put her foot down, and what she said was, 'We want these talks to fail,'" Schwesig said after the talks. "That's not what we want; we want a result which really does something to fight poverty in Germany."

The government needs the approval of the opposition since it does not have a majority in the upper house of parliament, the Bundesrat, which is made up of representatives of the federal states. It's now hoping that it can convince some of the states which are ruled by coalitions not to abstain but to vote in favor.

If the government fails to get its reform through in some form, the whole process of negotiation will have to start again, and individual welfare recipients will be able to go to court to appeal for a new calculation of their payments on an individual basis.

Author: Michael Lawton (dpa, Reuters, dapd)
Editor: Rob Turner