German chemical bosses and trade unions announced an agreement on April 16 that provides a 4.4% pay raise over 13 months to 550,000 workers in the key German industrial sector. The deal included a one-time bonus for 2008 and wages would rise by 3.3% in 2009, the IG BCE union said.
Compromises were found meanwhile regarding training and pensions, it added.
Workers at chemical giant BASF and industrial gas specialist Linde have said that strong corporate profits justified a 7% increase in pay, and had warned they would accept no less than 4.3%. Bosses underscored the "considerable financial charges" entailed, but representative Hans-Carsten Hansen added that "globally, we managed to obtain a measured agreement."
German public service and steel workers have also won substantial pay raises in the past weeks after demanding to share in the wealth following several years of belt-tightening.
The push for higher wages is spreading elsewhere in Europe as well amid inflation that hit a record 3.6% in March for the 15 countries that have adopted the euro. That has raised concern among governors of the European Central Bank however, who warn that excessive increases could fuel an inflation spiral that would be hard to control and negate much of the wage hikes. The ECB is thus more likely to keep its main lending rates unchanged even as central banks in Britain and the U.S. lower the cost of borrowing to spur economic activity.
Copyright Agence France-Presse, 2008