BERLIN (MNI) – Germany’s IG BCE chemical workers union and the BAVC
employers’ association are set to agree on a wage deal for some 550,000
employees in the sector at their two-day talks in the southwestern
German city of Bad Honnef starting on Wednesday.

Both sides are still far apart but have signaled that they want to
reach an agreement this week.

The IG BCE is seeking a 7% pay increase with a contract duration of
12 months. The demand reflects the “high expectations” of the rank and
file after sector growth of 11% last year and revenue increases of
17.5%, the IG BCE’s negotiation leader Peter Hausmann said recently.

“The chemical industry is humming,” Hausmann claimed, predicting
that it would return to pre-crisis levels this year.

The BAVC, however, argues that sector production growth this year
is expected to slow to 2.5% and revenue growth to 4.0%. Moreover, it
points out that much higher commodity and energy prices are weighing on
profits.

Wage deals in Germany this year so far have been rather moderate.

Earlier this month, state government employers and public sector
trade unions agreed on a two-year pay accord for some 585,000 employees
in the sector.

Under the deal, public sector employees will get a one-off payment
of E360 and a regular raise of 1.5% from April 1. On January 1, 2012
they will get another 1.9% pay hike plus E17 per month, which amounts to
an effective average raise of some 2.55%, the Verdi trade union said.
The pay deal runs until December 31, 2012.

The public sector agreement was the most important wage deal so far
this year. Wage hikes agreed in smaller sectors for this year mostly
range around 3%.

The European Central Bank will carefully monitor the outcome of the
wage talks in Germany’s important chemical industry. The central bank
has vowed not to allow higher inflation to trigger a price-wage spiral
in the Eurozone.

ECB Executive Board member Juergen Stark, a German national, said
last week that he sees risks of second-round inflation effects in the
Eurozone and added that, while inflation expectations remain anchored,
uncertainty has increased.

ECB Governing Council member Erkki Liikanen vowed last week that
the central bank’s monetary policy would ensure that commodity-related
inflation pressures emanating from the emerging markets do not become
more widespread in the Eurozone economy.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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