Unions, employers cite progress in German public sector wage talks

POTSDAM, Germany (Reuters) - Germany’s public sector unions and employers said they made progress on Sunday during a third round of wage talks, following warning strikes by than 150,000 union members last week.

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In a joint statement, both sides said they had moved closer on some issues and “initial progress” was made but differences remained about the scope and structure of a possible agreement. They are due to resume talks around midday on Monday.

Trade union Verdi, with 2.3 million members, and the dbb association of civil servants, which represents 344,000 people, are pressing for a 6 percent pay rise, or least 200 euros more a month. They said on Sunday they are willing to compromise.

Employers say the demand is too high but concede that public sector workers should benefit from strong growth in Europe’s largest economy.

“I hope that we can get it done in the next two days,” Interior Minister Horst Seehofer, leading the negotiations for the federal government, told reporters of the talks.

Verdi leader Frank Bsirske told reporters he expected a breakthrough, citing better-than-expected participation in last week’s strikes and public support for union demands.

Thomas Boehle, president of the VKA association of local employer organizations, told reporters he also expected movement on the wage issue in coming days.

Verdi’s Bsirske told the German newspaper Handelsblatt that surging German tax revenues meant the pay deal should definitely outpace the one from two years ago, when workers got an initial 2.4 percent increase, followed by a 2.35 percent increase.

In the industrial sector, 3.9 million workers agreed on a pay and flexible working hours deal in February that amounted to a roughly 4 percent rise per year for 2018 and 2019. Inflation edged up to 1.5 percent in March.

Germany is reporting buoyant tax revenues and a record budget surplus, with falling unemployment, inflation-busting pay rises and low borrowing costs fuelling a consumer-led upswing.

Reporting by Reuters TV; Additional reporting by Andrea Shalal; Editing by Matthew Mpoke Bigg