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German IG Metall, in pay talks, wants to trump chemical deal

Germany's biggest labor union, IG Metall, wants a bigger pay rise than the 3.6% won by chemical workers last week, a union official said, citing higher sales at companies such as DaimlerChrysler AG and Siemens AG.

IG Metall will seek 6.5% more pay in today's first round of talks for 700,000 staff in North Rhine-Westphalia, the most populous of Germany's 16 states. The IG BCE chemical union on March 8 won a 3.6% raise plus one-off payments after demanding as much as 4.5%, a deal that analysts said could set the tone for coming wage rounds in other industries. „We will insist on a bigger package” than chemical workers achieved, Detlef Wetzel, IG Metall's regional leader and chief negotiator, said in an interview. „The metal industry is in a much better state; we clearly deserve a bigger increase.”

Germany's fastest economic growth since 2000 last year has spurred IG Metall and other unions to raise their pay demands. The European Central Bank, which last week raised interest rates to 3.75% from 3.5%, has warned excessive pay gains may fuel inflation. Wetzel said last year's „moderate” 3% pay rise in the metal industry helped Germany's economy achieve 2.7% growth. Workers now want „a fair share” of the upswing, Wetzel said, also demanding compensation for estimated consumer inflation of 2.3% and productivity gains of 1.8%.

The Kiel-based IfW economic institute today raised its forecast for German growth this year to 2.8% from 2.1%, citing continuing „powerful economic recovery.” IG Metall may win a pay increase of more than 4%, IfW said. Employers in North Rhine-Westphalia, scene of last year's accord that served as a benchmark for all Germany's 3.4 million metalworkers, will propose a pay offer in the second round of talks on April 2, spokesman Eberhard Vietinghoff said by telephone. Today's first-round talks in the western city of Gelsenkirchen will start at 5 p.m. local time.

German wages rose no more than an average 2.2% per year between 2001 and 2005, according to data compiled by the union-funded WSI institute. (Bloomberg)