BUSINESSWEEK ONLINE : JANUARY 24, 2000 ISSUE
INTERNATIONAL -- INT'L FIGURES OF THE WEEK Country Focus/Germany (int'l edition) IG Metall, Germany's biggest union representing some 3.4 million industrial workers, has made its initial foray into this year's wage negotiations, and European central bankers are not happy. The union said on Jan. 12 that it is demanding a 5.5% wage increase, well above analysts' expectations. That figure far exceeds this year's expected 2.5% growth in productivity. The final IG Metall settlement typically sets the standard for other key industries in Europe. Last year's settlement of 4.2% came in below the initial demand of 6.5%, a likely pattern for 2000 as well. Still, analysts believe that the final pay raise could end up being 3% or higher, and that any hike above 3% would fuel inflationary pressures. With German growth and profits picking up, workers have more clout this year than last year. Top European Central Bank officials have warned that excessive wage demands could pose an inflation risk, especially since they would run counter to labor-market reform. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _					RELATED ITEMS International Figures of the Week (int'l edition) Country Focus/Germany (int'l edition) CHART: German Inflation INTERACT E-Mail to Business Week Online

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