February 26, 2018 / 8:50 AM / 10 months ago

German government rejects union call for 6 percent public sector pay rise

BERLIN (Reuters) - Germany’s federal government and municipalities on Monday rejected a call by trade unions for a public sector pay increase of 6 percent, warning that it was too much and would force them to outsource jobs.

FILE PHOTO: A whistle is seen over a logo of Verdi union during a strike in Frankfurt airport, April 27, 2016. REUTERS/Kai Pfaffenbach

The first round of wage negotiations for more than 2 million civil servants and other employees of the federal government and municipalities begins in Berlin on Monday. The talks are likely to last several weeks.

“The union demands are far too high and not feasible,” acting Interior Minister Thomas de Maiziere said in a statement, which said that public sector pay increases had exceeded the index of negotiated wage agreements in Germany over the past 10 years.

Thomas Boehle, president of the Municipal Employers’ Association (VKA), said he wanted swift and constructive talks. But he rejected the unions’ demand as too expensive, saying it would amount to an 11 percent increase for low-wage earners.

“An employee who sees his job being outsourced to a private company won’t benefit from an 11 percent pay hike,” Boehle told Neue Osnabruecker Zeitung daily. “But we want to keep all the jobs in the public sector.”

Germany’s powerful Verdi trade union and the dbb civil servants organisation want public sector workers to get 6 percent or at least 200 euros (175.61 pounds) more per month in a 12-month deal.

Verdi head Frank Bsirske told ZDF television that it was high time to improve the attractiveness of public sector jobs by raising wages at a time when the economy is booming.

Europe’s biggest economy is riding high, with tax revenues at record levels and the budget in surplus amid a consumer boom fuelled by moderate inflation and low borrowing costs.

In the industrial sector, 3.9 million workers earlier this month sealed a hard-fought deal on pay and flexible working hours that amounted to a hike of roughly 4 percent per year for both 2018 and 2019.

After years of restraint, significant across-the-board wage hikes in Germany would be likely to boost consumer spending further and potentially aid the European Central Bank as it tries to get euro zone inflation back up to its target rate of just below 2 percent.

Reporting by Michael Nienaber; Editing by Matthew Mpoke Bigg

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