(BRDO PRI KRANJU) - Eurozone finance chiefs warned on Friday that demands for big wage hikes could fuel a dangerous inflation spiral amid growing calls from trade unions for pay increases.

The appeal for restraint in wage negotiations comes as European trade unions prepare for a major march for pay hike on Saturday in Ljubljana as EU finance ministers hold a second day of meetings nearby in Brdo pri Kranju.

"We believe that inflation is also a matter that should be a source of concern to European unions and should influence them in the decisions they make," Luxembourg Finance Minister Jean-Claude Juncker told journalists.

"Inflation is a risk to those that have low purchasing power," he said after chairing a meeting with his eurozone counterparts.

Inflation in the 15 eurozone countries jumped in March to 3.5 percent -- the highest level since the bloc was formed in 1999, according to official EU data earlier this week.

In the face of such inflation, eurozone officials say that wage demands should not exceed productivity growth if pay hikes are not to fuel spiraling price increases.

"Moderation today is necessary if we want to deliver price stability in the medium term," ECB president Jean-Claude Trichet told journalists.

"Price stability is something which is essential for the poorest and most vvulnerable of our fellow citizens. It is absolutely clear they cannot protect themselves against inflation."

The European Trade Union Confederation expects as many as 40,000 union members to descend on the Slovenian capital Saturday from across Europe to press their demands for higher wages.

"This is a campaign launched in some anger and with real commitment," ETUC General Secretary John Monks said in a statement ahead of the march. "Getting a fairer deal for workers across Europe is a top ETUC priority."

Earlier this week German services union Verdi, the biggest in the country, and public sector employers struck a deal on wage hikes for 1.3 million staff of about eight percent over two years, averting potentially crippling strikes.

However, Trichet warned other unions against seeking similar wage deals, arguing that many German workers had uniquely gone without a pay increase for much longer than elsewhere in the eurozone.

"Negotiators who might wish to copy what has happened in the Federal Republic of Germany in terms of wage increases in the public sector would get things wrong because of the particular situation in Germany," he said.

Informal Meeting of Ministers for Economic and Financial Affairs (ECOFIN)

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