UPDATE 2-German IG Metall union sees higher wage deal
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FRANKFURT, April 9 (Reuters) - Germany's biggest industrial union IG Metall said it would probably aim for a higher wage deal than last year when it enters wage talks this autumn for the 3.5 million workers in the engineering and metalworking sector.
"If I were to decide on that today, then yes, but we have to see in September," union boss Berthold Huber told Reuters on the sidelines of a news conference on the misuse of temporary labour in Germany.
Coming the same day that the IMF forecast growth in Europe's largest economy would slow to 1.0 percent in 2009, his comments suggest the powerful union might be open to the possibility of a more moderate pay hike should the outlook darken in the coming months when it drafts its demands.
A sharp rise in wages in what is Germany's single biggest private sector deal would add to concerns at the European Central Bank, which has warned of the risks of wage hikes fanning inflation. Price growth is already running at a record high of 3.5 percent in the euro area.
Huber acknowledged that the rapid appreciation of the euro and the possibility of a recession in the United States could complicate the talks.
"Short term no," he continued, when asked whether he was concerned about the economic outlook. "The midterm is the question. There are so many uncertainties."
Despite the unpredictable risks to the German economy on the horizon, particularly for 2009, he said it was too early to say whether the union would push for a one-year deal only.
Should it end up as a two-year deal, Huber said the union would be cautious and consider the uncertainty in its demand, citing as evidence the current agreement which foresees starting in June with only a 2.4 percent hike after 4.1 percent in the previous year.
Although the IG Metall bases its official demand -- expected no later than Sept. 26 -- on productivity growth as well as inflation in the broader German economy, Huber said he was also under pressure from mem'bers who expect him to deliver a material rise in wages.
PUBLIC SECTOR NO BENCHMARK
"One cannot forget that there are wishes and emotions of the people that are working and at the moment they are very high...very high," he told Reuters.
Across Germany, organised labour has threatened and in some cases gone ahead with strikes to force public and private sector employers to be more generous with their wages amid a boom over the past two years.
Some two million German public sector workers last week won a raise worth just over 5 percent for this year, their biggest pay rise in 16 years. Other sectors like the steel industry have struck similar deals, bolstering expectations elsewhere, while workers in the chemical sector are demanding 7 percent more.
Last year, IG Metall went into pay negotiations demanding a 6.5 percent raise for workers in the engineering sector, and secured one of the most generous deals in Germany. Huber added that IG Metall would not orient its official demand on the recent public sector wage accord.
Traditionally, IG Metall's official demand is comprised of productivity growth added to inflation with a so-called "redistribution component" packed on top.
The sector's current wage contract, which affects companies like Siemens (SIEGn.DE) and most of Germany's major carmakers, expires at the end of October.
(Reporting by Christiaan Hetzner, additional reporting by Jan Schwartz; Editing by Andrew Hurst/Elaine Hardcastle)
