Bosses reject German union's six-percent pay rise claim

29th August 2010, Comments 0 comments

The head of Germany's employers federation for metalworkers Sunday rejected calls by the country's top union for a six-percent pay rise for 85,000 workers in the sector, saying the recovery was still shaky.

"After the deepest and most brutal slump in recent economic history, the recovery is still on wobbly legs," Martin Kannegiesser wrote in the Bild am Sonntag weekly.

Firing the opening salvo in what is expected to be long and drawn-out pay negotiations in Europe's biggest economy, the IG Metall union Friday called for an inflation-busting six-percent rise following years of wage moderation.

"Employees must gain something from the recovery. Higher wages are justified and sensible. They are good for people and good for the economy," the head of IG Metall, Berthold Huber, told the Bild am Sonntag.

Germany, Europe's economic powerhouse, has enjoyed a stellar bounce after a crippling recession during the global slump.

Output in the second three months of the year was 2.2 percent higher than in the same period the year before and the central bank has predicted annual growth of three percent.

However, economists believe the engine is set to lose some steam in the second half of the year, which will likely complicate the pay talks.

In addition, inflation in Germany remains tame, with recent figures showing prices in August rose 1.0 percent from the same month a year ago, well below the European Central Bank target of close to, but below two percent.

© 2010 AFP

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