German Industrial Union Secures 5.5% Wage Hike for Workers

German industrial workers at major companies like Mercedes-Benz and Siemens will receive a 5.5% wage increase over 25 months following a new agreement with employers. The deal, affecting 3.9 million employees, was reached after 18 hours of negotiations and aims to provide stability amidst economic challenges.

In a landmark decision, workers at leading German carmakers and engineering firms such as Mercedes-Benz and Siemens are set to receive a 5.5% wage hike spread over 25 months. This agreement, impacting approximately 3.9 million employees, was reached after intense 18-hour negotiations and marks an end to the recent worker strikes.

The agreement was welcomed by Siemens, which values the two-year planning security it offers, despite the spokesperson noting that the compromise pushes the limits of what the company can manage. The European Central Bank is monitoring the deal for potential inflation effects amidst Germany's economic contraction and a government crisis.

The wage increase starts with a 2% rise in April 2025, followed by a 3.1% boost in April 2026. While this falls short of the union's 7% demand, it surpasses the employers' original 3.6% offer. Economists view the decision as a shift towards wage restraint for job security, pending further developments in upcoming negotiations.

(With inputs from agencies.)