The employers and the unions in Germany announced overnight from Thursday to Friday an agreement for salary increases of 8.5% in total for more than 3.9 million employees of the electrometallurgy, ruling out the risk of hard strikes in a context of record inflation.
The pilot agreement, concluded in Baden-Württemberg (south) and which should be valid in the other German regions, foresees that this increase will take place in two stages in 2023 and then in 2024, indicated the powerful IG Metall union in a press release. , after several weeks of heated negotiations and numerous strikes across the country.
“Employees will soon have significantly more money in their pockets, and this in a sustainable way,” welcomed Jörg Hofmann, Chairman of IG Metall, quoted in the press release. An “inflation bonus” of 3,000 euros was also obtained.
Pressure
The union initially demanded an 8% wage increase over twelve months, its strongest demand since 2008, for this strategic sector of Europe’s leading economy.
It includes thousands of auto, electronics and machine tool companies, so negotiations in electrometallurgy come under particular scrutiny.
Employees had turned up the pressure in Germany: first with demonstrations for several weeks, then from October 29 with “warning strikes”, coordinated stoppages of limited duration that often accompany wage negotiations in this country.
If the bosses and the unions had not reached an agreement, strikes harder than 24 hours threatened the country.
“We will not hesitate to go on strike, the order books are full, there is no reason not to win the case,” union representatives had warned at the start of negotiations in September.
Sign
The employers’ representatives, who at first considered the level of salary increase unrealistic, considered the risk too great: “A social conflict would have caused even greater damage,” estimated the employers’ association Gesamtmetall in a press release.
“Ultimately, it is an expensive deal, but now we can focus on our work and do our part to overcome the announced recession as quickly as possible,” the organization adds.
Its president, Stefan Wolf, had warned of the burden that union demands represent at a time when many industries are already doubled by the cost of energy. “Some are struggling to survive,” he warned.
The agreement provides for a 5.2% wage increase in June 2023, followed by a 3.3% increase on May 1, 2024.
This deal could send a signal to other branches that are negotiating or will start negotiating on wages, such as the civil service sector. For some 2.5 million employees in this sector, the Verdi union is asking for an increase of 10.5%.
Dislike
In Germany, wage increases are negotiated branch by branch between unions and employers.
This standoff came as inflation topped 10% in October in Europe’s largest economy – unprecedented since the early 1950s – due to high energy costs caused by Russia’s war in Ukraine.
After a surprise increase in Gross Domestic Product (GDP) growth of 0.3% in the third quarter, Germany expects the next difficult months: Berlin forecasts a fall in GDP of 0.4% and inflation of 7% in 2023, according to the latest government forecasts.
As in other European countries, the fall in purchasing power in Germany generates discontent and social tensions that translate into demonstrations against the high cost of living.
Olaf Scholz’s government has launched a colossal envelope of more than 200 billion euros to help households and businesses, which includes several components, including targeted aid payments for the most vulnerable and the implementation early next year of subsidies that cap energy prices until spring 2024.
Source: BFM TV
