(Updates with quotes, details, background)
By Thorsten Severin
POTSDAM, Germany, April 1 The German government
and trade unions have agreed to a 3 percent wage increase for
some 2.1 million public sector workers this year and a 2.4
percent pay rise next year, Verdi union leader Frank Bsirske and
the government said on Tuesday.
The agreement - one of the biggest pay hikes for public
sector workers in years - takes effect from March 1 and also
includes a pay raise of at least 90 euros per month this year
for public sector workers at the lower end of the wage scale.
Labour unions in Germany have been getting above-average pay
hikes in the last year after a decade of wage restraint and
deals that failed to even keep pace with the country's inflation
rate, currently 1.0 percent. The moderate deals had improved the
country's competitiveness and helped reduce unemployment.
But the smaller pay rises had also put strains on the euro
zone and pressure on Germany to encourage higher deals to boost
consumption. Boosting wages and domestic demand in Germany are
widely seen as ways to help tackle current account imbalances
among euro zone countries.
German leaders had long stayed out of pay talks, but in the
last year they have signalled their support for higher pay hikes
in Europe's largest economy, where workers are enjoying the
benefits of economic strength and a healthy labour market.
"The result is among the best we've seen so far in 2014,"
said Verdi leader Bsirske. "It's in the same range as the
chemical workers will be getting. It feels good."
Germany's 550,000 chemical industry workers in February
agreed a 3.7 percent pay hike for the next 14 months.
German Interior Minister Thomas de Maiziere, who led the
government side, praised the agreement even though it will cost
taxpayers and financially stretched communities an extra 2.55
billion euros in 2014 and a further 2 billion euros in 2015.
"It's a good and fair result," said de Maiziere after the
unusually quick agreement. "The result reflects both the
interests of taxpayers but also takes into account the
justifiable wishes of public sector workers for a pay raise."
The unions had backed their demand with brief token strikes
involving some 200,000 workers at German airports,
kindergartens, town halls, and public swimming pools last week.
Trash collectors also took part in the walkouts.
Verdi and the DBB German civil servants trade unions had
called for pay rises of 3.5 percent for federal and municipal
workers and an extra 100 euros per month. Employers said such
demands were excessive.
(Writing by Erik Kirschbaum and Michelle Martin; Editing by