Germany wages go up 2.3m euros more than expected

Image copyright Reuters Image caption Works council chairman Thomas Bangfrand gestures as he speaks at the meeting in Frankfurt

Workers in Germany are to receive almost two million euros (£1.7m) more in wages this month, the government says.

The one-off payment – put at 23.6bn euros – was due to be made in 2019, but unions negotiated a five-year deal that gave them the boost early.

The deals with unions covering almost all of Germany’s jobs should be finished within days.

The wage rises were negotiated with the country’s main trade unions, despite strikes over plans to reform pensions.

Germany’s economy has seen growth of almost three percent in the first quarter.

‘Bigger pay cheque’

Two million public sector workers and nearly 200,000 workers in the private sector will get a 5.8% wage increase while 1.7 million workers in the public sector and 230,000 in the private sector will get a 10.5% pay rise.

Unions had previously pressed for a smaller wage increase, but Germany’s employers group had asked for an extra 1.2-1.6% above the inflation rate.

Workers will also get an extra 2% in benefits payments and a 0.6% tax break.

Full details will be announced at a press conference later on Friday.

‘Solidarity in action’

People queue to spend public money as they celebrate the resignation of the People’s Party’s head of parliamentary group (EPP) Jurgen Frick, following an early poll, in Berlin, Germany, 24 March 2015. Image Credit: REUTERS/Fabrizio Bensch

Last month, about 200,000 private sector workers in Germany struck over plans to reform the country’s public sector pensions system.

The reform included a means-testing element, in which people with big health bills would lose the funds from state benefits.

The government had originally said it was willing to open talks on the reform after the German elections in September.

‘Best conditions’

German Chancellor Angela Merkel has said she hopes “the unions will take this as a signal to further increase wages”.

The unions should also push for the passage of the free movement agreement, which has a lot of potential in Germany and elsewhere in Europe but is only making steady progress.

The leaders of six of Germany’s largest trade unions met on Thursday to discuss proposals to tackle pension reform for the private sector as well as EU negotiations over the free movement agreement.

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