German government officials and trade unions have finally reached a pay deal for over 2.5 million public sector workers, bringing an end to a longstanding dispute and averting the possibility of widespread strikes. The agreement was reached after a proposal by arbitrators was accepted by both parties. The deal includes one-off payments totaling 3,000 euros per employee, with the first 1,240 euros being paid in June, followed by monthly payments of 220 euros until February next year. In addition, regular monthly pay will increase by 200 euros in March, followed by a 5.5% salary increase. The agreement is set to run through to the end of 2024.
The union, ver.di, had initially sought a one-year deal with a 10.5% increase, but ultimately accepted a compromise after reaching its “pain threshold”. According to the union’s chairman, Frank Werneke, the increase in regular pay next year will amount to a rise of over 11% for most employees. The deal comes as Germany struggles with high inflation, with the annual inflation rate standing at 7.4% in March.
Frank Werneke (Via Frank Werneke/Twitter)
The agreement is a relief for the government, which had been keen to avoid the disruption caused by the union’s frequent walkouts over recent months. The latest one-day strike, staged by ver.di and the EVG union, had paralysed much of the country’s transport network. EVG, which represents many railway workers, is still seeking a 12% rise and has rejected the arbitration proposal. The union is due to hold further talks with the government on Tuesday, while ver.di is still in dispute with Germany’s airport security companies’ association over pay and conditions for security staff.
The deal is seen as a compromise, with the government accommodating the union’s demands as far as it could responsibly do in a difficult budget situation. The agreement will likely have a positive impact on public sector workers, providing them with a significant increase in pay and a sense of stability.
