German government, labour unions reach pay deal for public workers

German government officials and labour unions have reached a pay deal for more than 2.5 mn public-sector workers, ending a lengthy dispute and heading off the possibility of disruptive all-out strikes

German government officials and labour unions have reached a pay deal for more than 2.5 million public-sector workers, ending a lengthy dispute and heading off the possibility of disruptive all-out strikes.

The ver.di union had pressed for hefty raises as Germany, like many other countries, grapples with high inflation. Interior Minister Nancy Faeser said as the deal was announced early Sunday that we accommodated the unions as far as we could responsibly do in a difficult budget situation.

The deal entails one-time payments totalling 3,000 euros (USD 3,300) per employee, with the first 1,240 euros coming in June and monthly payments of 220 euros following until February.

In March, regular monthly pay for all will be increased by 200 euros, followed by a salary increase of 5.5 per cent. The deal runs through to the end of 2024.

Ver.di originally sought a one-year deal with a raise of 10.5 per cent. The deal was reached on the basis of a proposal by arbitrators who were called in after talks broke down last month.

Ver.di chair Frank Werneke said that we went to our pain threshold with the decision to make this compromise. He said that the raises in regular pay next year will amount to an increase of over 11 per cent for most employees.

Germany's annual inflation rate has declined from the levels it reached late last year but is still high. It stood at 7.4 per cent in March.