Germany agrees pay increase

City A.M. Reporter
GERMANY’S public sector union Verdi agreed over the weekend to a 1.2 per cent rise this year for roughly two million federal government and local authority workers, government and union leaders said.

The agreement for 2010, which is the cornerstone of a 26-month deal from January 2010, was reached at a final day of talks in Potsdam, southwest of Berlin.

“It’s a responsible compromise all in all,” said German Interior Minister Thomas de Maiziere, who led the government’s side in the talks.

“There's no cause for joy with this result but it was obvious it would be difficult this year,” said Verdi leader Frank Bsirske.

On Thursday, an arbitrator was called in to resolve the dispute and he proposed the 1.2 per cent rise this year, post dated back to January.

From January 2011, public sector workers will receive a further 0.6-per cent rise and a €240 (£214) one-off payment.

From August 2011, they will get an additional 0.5 per cent increase.

A pay accord this month for Germany's engineering sector will give the industry’s 3.5m workers what economists have described as the lowest raise in at least 25 years.

The engineering accord, which often sets the benchmark for other sectors, foresaw a one-off payment of €320 this year and a fixed wage rise from April 2011.