German union gets raise
Source: Agencies |
May 20, 2012, Sunday
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Print Edition
Print Edition
GERMANY'S largest industrial union IG Metall will get its biggest pay rise in 20 years after agreeing to a 4.3-percent pay increase deal with employers at the end of marathon talks that ended just before dawn yesterday.
The wage deal, which is more than double Germany's inflation rate of about 2 percent, will give some 3.6 million engineering workers a 4.3-percent pay rise for 12 months from May 1 and set a high benchmark for other unions in Europe's largest economy.
It will be the biggest annual increase since IG Metall won a 5.4-percent pay rise in 1992, according to union officials.
The agreement for the sector at the heart of the German economy came after all-night negotiations. Officials from the two sides confirmed the breakthrough at a news conference.
The talks between the giant union and officials representing Germany's leading manufacturing sector that includes carmaking powerhouses such as Volkswagen, Daimler and BMW were closely followed across Europe, which is battling to overcome a sovereign debt crisis that has been exacerbated by imbalances linked to low wage growth in Germany in the last decade.
The size of the deal is a signal that Germany is willing to tolerate higher wages, even if that pushes up inflation, in order to help weak euro members on Europe's southern periphery.
The IG Metall deal ends a disruptive series of partial walkouts and warning strikes across the country by the union to press demands for a 6.5-percent pay rise. Employers had offered a rise of just under 2.6 percent. Union officials had threatened a full-fledged strike.
The wage deal, which is more than double Germany's inflation rate of about 2 percent, will give some 3.6 million engineering workers a 4.3-percent pay rise for 12 months from May 1 and set a high benchmark for other unions in Europe's largest economy.
It will be the biggest annual increase since IG Metall won a 5.4-percent pay rise in 1992, according to union officials.
The agreement for the sector at the heart of the German economy came after all-night negotiations. Officials from the two sides confirmed the breakthrough at a news conference.
The talks between the giant union and officials representing Germany's leading manufacturing sector that includes carmaking powerhouses such as Volkswagen, Daimler and BMW were closely followed across Europe, which is battling to overcome a sovereign debt crisis that has been exacerbated by imbalances linked to low wage growth in Germany in the last decade.
The size of the deal is a signal that Germany is willing to tolerate higher wages, even if that pushes up inflation, in order to help weak euro members on Europe's southern periphery.
The IG Metall deal ends a disruptive series of partial walkouts and warning strikes across the country by the union to press demands for a 6.5-percent pay rise. Employers had offered a rise of just under 2.6 percent. Union officials had threatened a full-fledged strike.
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