German metalworkers clinch pay rise

Germany's giant IG Metall union said on Tuesday it had struck a deal with employers for a 3.8-percent pay rise from December for workers that should serve as a model for the rest of the German economy, the biggest in the European Union. IG Metall said that 75,000 workers in the west of the country would receive the rise, effective December 1. The new deal is valid until at least the end of February 2013. The union had initially demanded a seven-percent pay rise. Pay deals in Germany are reached between unions and employers without government intervention and the IG Metall agreement traditionally serves as a basis for other negotiations. Between now and the end of 2012, salary talks affecting some nine million people in Germany will take place. For years, unions in Germany have accepted low pay rises to keep the country competitive amid the crisis. Inflation in Germany slipped in October to an annual 2.5 percent, after hitting a three-year high the previous month.