Monetary policy

Complexity aside, German wage deal should cheer up the ECB

Agreement could push inflation closer to central bank's target

bloomberg

06.02.2018

Germany’s most powerful union has struck a pay deal with employers that might just satisfy the European Central Bank.

The complex agreement, which stretches over 27 months and includes a 4.3% wage hike, one-time payments and options to temporarily cut working hours, boils down to average annual increases of roughly 3.7% in 2018 and 4% in 2019, according to Oliver Rakau, an economist at Oxford Economics in Frankfurt.