German public sector workers agree to wage deal with employers

BERLIN (Reuters) – German public sector workers have agreed on a wage deal with employers, Interior Minister Nancy Faeser and the Verdi union said on Saturday, ending a dispute that has disrupted the transport sector in Europe’s biggest economy.

The agreement for around 2.5 million workers in the sector follows arbitration.

Under the deal, each worker will receive a total of 3,000 euros in tax-free payments in instalments through to Feb. 2024 to help offset inflation, said the ministry in a statement.

From March 2024, wages will rise by 200 euros per month and in a second step, there will be a 5.5% increase, it said.

The deal will run for two years.

Verdi, which had wanted 10.5% more money, said it would start a survey of its members with the wage commission making a final decision on May 15.

“We have reached our pain threshold with our decision to make this compromise,” said Verdi chief Frank Werneke.

A surge in the cost of living this year has led to some of Germany’s most disruptive strikes in decades.

Consumer prices soared by 9.6% in Germany in 2022 but price pressures have abated in recent months after a winter energy crunch did not materialise and supply chain problems eased.

“This agreement brings noticeable relief to employees. The tax-free payments will show up quickly in wallets,” said Interior Minister Nancy Faeser.

Last month, strike action from unions Verdi and dbb brought railways and airports to a near-halt in Germany’s biggest walkout in more than three decades, according to Verdi.