BERLIN -- Germany's powerful union IG Metall agreed a pay deal with the metal industry's employers association early Wednesday, averting the threat of a major strike.
Under the deal, salaries will increase in two steps over the next year: a 3.4% rise in July and a further 2.2% rise in May 2014, the two parties said in statements.
IG Metall had sought a 5.5% pay rise this year.
The Gesamtmetall employers association had originally offered a 2.3% rise over a slightly different time frame.
"With this deal, workers are being treated in a fair and appropriate way, in line with the economic situation," said IG Metall president Bertold Huber.
The union had warned on Sunday that metal workers would vote on major strike action if no agreement was reached this week.
IG Metall is Europe's largest union with more than 2.2 million members. Pay talks in the metalworking sector are closely watched because they set the tone for other industries.
The union sought the pay rise for 3.7 million metal workers spread across different branches, from automobiles to electronics.
Copyright Agence France-Presse, 2013