Germany, 5% increase in salaries and anti-inflation bonuses for state workers – Corriere.it

In Germany, the wage increase agreement for 2.5 million civil servants, signed on the night of Saturday 22 April, is the most expensive of all time: approximately 17 billion for German municipalities and cities and 5 billion for the federal government . The long and close negotiations led to a real increase in salaries of 5-5.5%, to compensate for inflation which has reached record peaks in recent months. The agreement, which averted the announced new strikes, provides for a permanent and one-off tax-free increase spread over 24 months. We have reached a responsible wage agreement, said Interior Minister Nancy Faeser, head of the federal civil service.

The wave of strikes

Social tension had risen in recent weeks after several unsuccessful negotiations, accompanied by a flurry of strikes in many public sectors – post, transport and hospitals – in a context of sharp price increases. Now, around 2.4 million municipal and 134,000 federal workers will see their salaries increase by at least 340 euros a month, starting in March 2024, while a tax-free inflation compensation of 1,240 euros and then 220 euros per month starting from July 2023 until February 2024, for a total of 3,000 euros.

Verdi: With this compromise we have gone as far as possible

By deciding to accept this compromise, we have gone to the max, commented in a statement Frank Werneke, president of the United Services Union (Greens), which represents public sector employees and who, at the end of March, by adhering to a national stoppage, had contributed to paralyze the transport sector in Germany. Verdi and the federation of civil servants were asking for a salary increase of 10.5% and at least 500 euros a month for a period of twelve months.

The wage-price spiral alarm

According to the unions, the impact of the agreement on the pockets of German civil servants ranges from 8 to 12% (with peaks of up to 18% for nurses). Excluding contributions, it stands at around 6-7%, but for some economists, the agreement could trigger a wage-price spiral in Germany, with consequent repercussions on the entire euro area and making it more difficult to reach the target of drop in inflation to 2%. The alarm is defined as “unjustified” by other economists, who see the 5% increase in line with the ECB’s expectations for this and next year. Meanwhile, negotiations continue in other sectors: from the railway workers, who went on strike on Friday 21 April, to the airport workers, who crossed arms in Berlin on 24 April.