Abstract
The Grand Coalition of 2005, formed after painful electoral losses, forced both the CDU/CSU and the SPD to retract from the more radical neo-liberal positions of the Leipzig Programme and Agenda 2010 respectively. Yet labour market policy showed no signs of a fresh start and continued in the framework set by the Hartz reform measures, fine-tuning and adjusting them. No comprehensive agreement could be reached on the contested issue of a statutory national minimum wage; instead a fairly limited sector-focused compromise solution was found. However, the ideational commitment of German employers to a more liberal position and the now permanent bifurcation of the labour market point to systemic transformations that are not properly included in most conceptualisations of the German model in the comparative political economy literature.
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