* Von der Leyen wants pay rises of more than 2 pct
* Coalition allies dismiss minister's intervention
* Sluggish German wage growth factor in euro zone crisis?
By Erik Kirschbaum
BERLIN, Feb 12 German wages should be
raised by more than 2 percent this year, Labour Minister Ursula
von der Leyen said in an unusual appeal to employers on Sunday
that was quickly criticised by leaders of her own ruling
Von der Leyen, sometimes mentioned as a candidate to succeed
Chancellor Angela Merkel, told Bild am Sonntag newspaper that
workers in Germany deserved a pay raise above the inflation
rate, currently 2.1 percent, after years of settling for less.
Wages for some 9 million workers are up for negotiation in
the weeks ahead and Germany's two biggest unions are seeking 6.5
percent pay rises: the powerful IG Metall for the 3.6 million
workers in the engineering sector and Verdi for 2 million public
sector workers. Employers dismiss the demands as exaggerated.
Modest wage increases in the last decade have boosted
Germany's competitiveness but they are also sometimes blamed by
economists for contributing to imbalances in Europe that have
exacerbated the euro zone crisis.
Between 2000 and 2007, nominal compensation in Germany grew
by a mere 1 percent per year on average compared with 2.7
percent in the combined euro zone. German wages rose more
strongly in 2011 but by a still modest 1.5 percent average.
"In recent years we've worked quite industriously in Germany
while at the same time exercising restraint when it came to pay
deals so that we were able to get through the financial crisis
in good shape," said von der Leyen, a conservative party leader.
"Now that that's succeeded and German corporate profits are
strong, it's time for workers to get a share of that and get a
palpable pay rise," she added.
When asked how palpable, she said: "The pay rise should be
more than the inflation rate so it won't be eaten right up."
SHARE OF PROSPERITY?
It is rare for German political leaders to intervene in pay
negotiations, which they stay out of by saying they are for
employers and workers to decide on their own. It was even more
extraordinary for Von der Leyen to identify a concrete target.
She was quickly criticised by party ally Michael Fuchs, a
member of parliament in Merkel's Christian Democrats (CDU) and
ardent defender of industry. A leader of the Free Democrats
(FDP) coalition partners also dismissed von der Leyen's ideas.
"One has to anticipate what's going to happen in the future
when coming up with wage policies and thus it's not clear
whether the current economic conditions will continue," Fuchs
told the Sonntag Aktuell newspaper on Sunday.
Fuchs said political leaders should stay out of wage talks,
a view backed by Heinrich Kolb, deputy FDP leader in parliament.
Kolb said workers in Germany were already profiting from the
economic upturn "because many more people now have a job."
Von der Leyen said the economic outlook in Germany remained
bright and said employers have an obligation to workers.
"The hard facts in Germany point to strong conditions on the
labour market and full order books," she said. "The basic
promise of our social market economy has always been: if we all
work hard together, everyone will share in the prosperity."
Subdued pay rises in the last six years have strengthened
Germany's competitive position. After unemployment levels peaked
in 2005, reforms boosted the labour market and employment levels
are now at record levels.