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Employment Commissioner calls for pay hikes in Germany

20 September 2012, 20:45 CET
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(BERLIN) - European Commissioner for Employment, Social Affairs and Inclusion Laszlo Andor called for an increase in German salaries in order to help energise the EU's struggling economy.

"Salaries in Germany must follow developments in productivity," Andor told newspaper Frankfurter Allgemeine Zeitung in an interview to be published on Friday.

"For the past decade, we have sharply held back on salaries in Germany to boost competitiveness, but this has had consequences on other countries in the European Union," Andor, a Hungarian economist, said.

The call came amid recent calls by German unions for wage hikes after years of salary stagnation, with salary increases already agreed for metalworkers.

Germany's economy, the EU's biggest, has largely defied sagging growth elsewhere and many economists argue that only a jump in German household consumption, fueled by wage hikes, could help lift its neighbours.

On Thursday, a closely watched survey showed that eurozone private sector business activity declined for an eighth straight month in September, hitting its gloomiest patch in three years.


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