UPDATE 1-IG Metall will seek wage rises of up to 5.5 pct

Wed Feb 27, 2013 6:03am EST

(Adds details, background)

FRANKFURT Feb 27 (Reuters) - Germany's IG Metall trade union expects to seek a wage rise of up to 5.5 percent for workers in the metal and electrical sectors, below last year's demands but likely to result in an above-inflation hike again for its 3.7 million workers.

Germany's federal election in September is emboldening unions to push for higher wage increases as they expect politicians courting voters to back their demands.

Berlin also faces calls from struggling countries in the euro zone to encourage higher wage increases to stimulate demand in Europe's biggest economy and thus attract more imports.

"We will propose that the board agree a demand of up to 5.5 percent. This number applies to a 12 month period," IG Metall chairman Berthold Huber said late on Tuesday in comments embargoed for release on Wednesday.

The board will discuss the proposal next Monday. IG Metall said on Tuesday it was seeking a pay hike of 5.5 percent for industrial workers in the southwestern state of Baden-Wuerttemberg, usually a bellwether for the rest of the country.

Huber said the demand would be for 12 months only, not longer, because it was difficult to predict economic developments in 2014. He also said he envisaged a quick conclusion to the talks.

A 5.5 percent demand would be lower than the union's call for 6.5 percent last year and is made up of the inflation rate, an increase in productivity - which the union sees at 3.5 percent - and the rest to boost private consumption.

It is expected to lead to another above-inflation increase, given the relative strength of Europe's largest economy and the calls from elsewhere in the euro zone for Germany to do more to boost domestic consumption.

Last year, the union secured its biggest pay rise in 20 years - a 4.3 percent wage hike over 13 months, increasing the sector's wage costs by around 7 billion euros.

After a decade of wage restraint, with increases lagging inflation, German paychecks outstripped a 2.0 percent inflation rate in 2012 to rise by 2.6 percent. (Reporting by Alexander Huebner, writing by Annika Breidthardt, editing by Gareth Jones)

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