Two million German public-sector workers will get a pay raise of 6.3 percent over a 24-month period, according to the government official leading the talks, ending a labor dispute that disrupted services across Germany in recent weeks.
German Minister of the Interior Hans-Peter Friedrich, who had led the negotiations with the Verdi union on behalf of the government, announced the breakthrough shortly before 7am yesterday after all-night negotiations in Potsdam, a suburb of Berlin.
“This wasn’t a marathon, this was an Ironman [Triathlon],” Friedrich told reporters at dawn yesterday at the end of the final round of talks that started on Friday.
He said employers had gone to the outer limit of what was acceptable.
Verdi leader Frank Bsirske said it was difficult to accept the deal, but at least the union had managed to narrow the gap to the pay raises workers in the private sector have been receiving. The annual inflation rate in Germany is about 2 percent.
Verdi, one of Germany’s biggest and most influential unions representing 2 million public-sector workers, had been seeking a 6.5 percent raise for one year after years of accepting modest pay deals. Verdi rejected an earlier offer of a 3.3 percent raise, staggered over two years.
Wage raises in many other eurozone countries have been steeper than in Germany, fueling the economic divergence that has underpinned the debt crisis in the single-currency area. The deal ends the threat of a broader walkout following a series of recent warning strikes that have disrupted Europe’s largest economy.
Up in the air
Overall, wages for 9 million German workers are up for negotiation this year and the public sector deal will likely serve as a model for other unions.
With Germany’s economy growing strongly, higher-than-expected tax revenues gave the federal government and local communities more scope for pay raises. The union had pointed that out in the course of 55 hours of talks in recent weeks and argued they accepted modest pay deals in leaner past years.