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Business Leaders Offer Advice to Germany's Bundesbank: Mind Your Own Business

Busfahrerstreik
Bus drivers participating in a warning strike in western Germany.
  • Why it matters

    Why it matters

    Worker pay has a big impact on the German economy and to date German employers have been autonomous in negotiating with the unions.

  • Facts

    Facts

    • In June, the Bundesbank, concerned about low inflation rates, advised unions to be less restrained in future wage negotiations.
    • Higher wages and salaries would increase the inflation rate and lessen chances of deflation.
    • Pay talks should remain the business of tariff partners only, critics say.
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    Audio

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Germany’s central bank has annoyed employers by getting involved in wage negotiations. The challenge for wage tariff partners in finding an appropriate formula for a particular industry is a sophisticated, complex process, according to the federal employers association of the chemical industry.

“General pronouncements of third parties are usually not helpful,” said Oliver Zander, managing director of the metalworking industry employers’ association. The Bundesbank’s initiative is inappropriate, he added.

The criticisms came after a meeting between the Bundesbank and the German trade unions association in late June. At the meeting, the Bundesbank delegation advised the unions to be less restrained in future wage tariff negotiations and to use the room to maneuver created for them by inflation and productivity developments. A hidden agenda: Higher wages and salaries would affect the inflation rate and remove the danger of deflation.

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