Two million German public-sector workers will get a pay rise of 6.3 percent over a 24-month period in a deal that ends a labor dispute that has disrupted services across Germany.
The deal, sealed between the government and ver.di trade union Saturday, ends the threat of a broader walkout following a series of warning strikes that have disrupted Europe's largest economy.
Finance Minister Wolfgang Schaeuble, speaking at a meeting of European finance ministers in Copenhagen, called it a 'reasonable outcome' although it went 'to the outer limits of what the federal government and communities can afford'.
Ver.di, one of Germany's biggest and most influential unions representing 2 million public-sector workers, had been seeking a 6.5% rise for one year after years of accepting modest pay deals.
Overall, wages for some 9 million German workers are up for negotiation this year and the public sector deal may serve as a model for other unions. However, IG Metall has said it would seek an annual rise of up to 6.5% for its three million members in Germany.
As Schaeuble says this is a most 'reasonable' settlement. Not only because of the years of restrained pay growth Germany workers have been putting up, despite the so-called German 'economic miracle'.
For this squeeze on incomes for the 99% comes as the flow of euro-millions to Germany's 1% has been getting considerably more generous over the same period.
Last year the CEOs of Germany's 30 biggest companies saw their pay rise 9% to the highest level for five years, according to management consultancy firm HKP.
The fat cats at the top of the 30 companies in Germany's blue-chip DAX stock index earned an average €5.04 million ($8.05 million) in 2011, 8.7% more than in 2010 and the highest level since 2006, HKP's study found.
Last year's biggest single earner was Volkswagen chief Martin Winterkorn, who earned a record €16.6 million ($26.5 million) including bonuses. Deutsche Bank CEO Josef Ackermann was in second place with €9.355 million ($14.9 million).
At the bottom of the fat cat ranking was poor old Thomas Quaas, head of cosmetics group Beiersdorf, who only took home €1.42 million ($9.3 million), while Commerzbank chief Martin Blessig earned just €500,000 (close to $8 million) because the bank is currently under 'state supervision' (the state owns 25% of the bank and has given it €18 billion -- $28.7 billion -- in state aid).
Compared to fat cats elsewhere around the globe, VW's Winterkorn is the third-highest paid chief executive, behind Robert Iger of Walt Disney, with the equivalent of €21.85 million ($34.9 million), and Hewlett-Packard's Leo Apotheker with €18.12 million ($28.9 million).
Tom Gill is a London-based journalist who writes regularly for the U.K.'s Morning Star, the daily socialist newspaper, and Tribune magazine, the labor weekly. Follow him on twitter @tomgilltweets.
Photo: At a demonstration of IG Metall workers, March 27, in Munich with a banner reading "Munich IG Metall: 6.5 percent -- we deserve it." Lennart Preiss/AP