Public officials in Germany set to stage further strikes over wage dispute

By on 14/04/2016
German Interior Minister Thomas de Maizière led the negotiations on behalf of the government.

Public sector workers in Germany are set to stage further strikes later this month over failed wage negotiations with the government.

Verdi, one of Germany’s biggest and most influential unions representing 2m public sector workers, had been seeking a 6% rise in bargaining talks which began at the end of March.

But interior minister Thomas de Maizière, who is leading the negotiations on behalf of the government, has rejected this as “unrealistic and exaggerated.”

On Tuesday, after the second round of talks, the government offered a 3% rise, staggered over two years.

“I think it’s a fair deal,” de Maizière said.

But Verdi union boss Frank Bsirske dismissed the offer as “cheeky and provocative” and accused the government of failing to appreciate the work carried out by public officials.

Until the third round of negotiations on 28 and 29 April, strikes are expected at hospitals, kindergartens and city council offices.

They follow previous industrial action by public officials working at council offices, in buses, trains and nurseries earlier this month.

Bsirske said he was “angry” over the proposals and that public sector workers had no choice but to strike “to make clear that the government cannot treat us like this.”

He said that the government’s offer meant a public sector pay cut in real terms, which, in light of “the exceptionally good” cash position of state coffers, “is nothing but a provocation.”

The federal government has run a balanced budget since 2014 and the state, including social funds, is heading for an overall surplus of €11bn ($12.4bn) this year and €10bn ($11.3bn) next, according to estimates by Germany’s leading economic institutes.

Thanks to the strong labour market and record-low inflation, real wages in Germany have risen last year at the strongest rate since 2008, in a boost to private consumption which has become the main driver of growth in the nation’s economy.

In 2015, the gross domestic product (GDP) grew by 1.7%, with domestic demand nearly being the sole driver of growth while net foreign trade only contributed little.

This year, the government expects growth to be entirely domestically-driven. Net foreign trade will only hinder the expansion, with overall exports hurt by waning demand for ‘Made in Germany’ goods from emerging markets such as China.

The institutes, whose analysis feeds into government policy and its economic forecasts, said today that the government should spend the excess on cutting income taxes and boosting investments in infrastructure and education.

“A continuation of the barely growth-oriented economic policy of recent years would not be sustainable,” they said in their spring report.

Boosting investments in education “is also important to facilitate the integration of migrants into the labour market.”

Citing waning demand from abroad for German goods and services, the institutes lowered their 2016 economic growth forecast for Europe’s largest economy to 1.6% from 1.8%.

The government is expected to update its economic forecasts for this year on 20 April.

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See also:

Refugee wave into Germany offers chance to boost nation’s productivity, says OECD

Managing the EU Migration Crisis

OECD calls on Poland to introduce ‘cooling-off’ periods for senior officials

Germany announces $299bn infrastructure investment

UK government departments to face further cuts, chancellor reveals in budget

About Winnie Agbonlahor

Winnie is news editor of Global Government Forum. She previously reported for Civil Service World – the trade magazine for senior UK government officials. Originally from Germany, Winnie first came to the UK in 2006 to study a BA in Journalism & Russian at the University of Sheffield. She is bilingual in English and German, and, after spending an academic year abroad in Russia and reporting for the Moscow Times, Winnie also speaks Russian fluently.

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