German deals rely heavily on lump sums

Two settlements in Germany this month have included lump-sum payments as important ingredients, reflecting the difficult negotiating climate at present.

The deal in the coal mining industry, which has 39,000 employees, provides for a €400 lump sum in December 2005, to cover both 2005 and 2006. Only in January 2007, as the 32-month agreement runs out, will there be a pay rise of 1.5%.

Werner Bischoff, who signed the agreement for the chemical and energy union IGBCE, accepted that it provided "no ground for celebration" but said that, in the light of the industry's problems, "we have got what was possible".

In the 80,000-employee tourism industry, services union Verdi has signed a two-year deal providing increases of 1.4% on 1 July in both 2004 and 2005, plus lump sums of €300 in 2005 and €150 in 2006. The deal takes the starting pay for the lowest grade to €1,417 a month.

Inflation in Germany is currently running at 1.7% (May 2005).