On the morning of Friday 13 May, negotiators from both the employers’ federations (Gesamtmetall) and the union (IG Metall) in the State of North Rhine-Westphalia (NRW) presented a pilot agreement that was reached following fourteen hours of talks. In the next few days other regional federations are also expected to take it up. No one was expecting any negative surprises and most seems to be satisfied with the contents of the agreement, which covers some 3.8 million employees. A €150 bonus payment as well as a 4.8% pay rise means that IG Metall more or less secured what it was looking for (5% wage rise). As for the employers, they secured a ‘long agreement’ that runs for 21 months and they also secured the reintroduction of the ‘differentiation clause’ that had been absent from these agreement for the several years.
A favorable backdrop. Don’t let appearances be deceiving. Although four meetings were needed including the final 14-hour marathon and although IG Metall had also flexed its muscles by mobilizing 780,000 workers in several work stoppages, the negotiations atmosphere was from the outset one of compromise. The current business climate is a contributing factor as Germany’s 2016 first quarter performance exceeded expectations. Q1 GDP was reported as 0.7% as compared with 0.3% in the final quarter o
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