Pay Deal Averts Major Strike in Germany

Employers and union IG Metall agree to 4.2% wage increase

A moderate pay deal clinched on Nov. 12 averted a strike by 3.6 million German metal and electronics sector workers that had threatened to deal another blow to Europe's largest economy. Employers and union IG Metall in Baden-Wuerttemberg, which usually serves as a model for other states, said they had agreed to a 4.2% wage increase over an 18-month period.

It fell short of the 8% Germany's biggest industrial union had originally sought.

The agreement foresees two increases of 2.1% next year plus a one-off payment of 510 euros (US$640) covering November, December and January, a statement said.

The accord, struck after 23 hours of hard bargaining, follows nationwide warning strikes since October 31 in which more than 500,000 workers across Germany participated.

Employers also seemed satisfied with the deal. "The whole package is appropriate in this uniquely difficult environment, gives our workers more money despite the crisis and gives companies a large degree of cost flexibility for a difficult year in 2009," said the head of Baden-Wuerttemberg's employers association, Jan Stefan Roell.

Copyright Agence France-Presse, 2008

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