IG Metall Demands Inflation-Busting Eight Percent Wage Hike

IG Metall boss Berthold Huber told journalists in Frankfurt discussions with shop stewards were continuing and that the final demand should become clear in a fortnight.

He based the demand, which is well above German consumer inflation of around 3.3 per cent on the year, on price increases, increased productivity and strong profits in the sector, which is a major component of Germany's highly successful export machine.

Huber highlighted another key concern in Germany; soaring executive pay, saying there was a need for social justice to be taken into account.

German trade unionists have long argued that while workers showed restraint through a long economic slowdown at the beginning of the decade, they have not seen any rewards for the upswing over the past two years.

The European Central Bank (ECB) has maintained a strong anti-inflationary stance, despite indications of a slowdown in the European economy in general and in its largest economy, Germany, in particular.

ECB President Jean-Claude Trichet has warned repeatedly of "second-round inflationary effects" following on from the higher commodity prices that have driven up the cost of fuels and food in recent months, warning against high wage demands.