BERLIN, Germany: Germany's largest industrial union, IG Metall, announced on June 17 its intention to seek a seven percent pay increase for millions of workers in the upcoming wage negotiations later this year.

This demand targets workers in industries including automotive and machinery manufacturing.

IG Metall's leadership recommended a substantial raise for 3.9 million workers, citing "a persistently high price level" as the main reason. The union noted that companies have strong order books and that inflation has eroded the value of previous one-time payments agreed upon in the last settlement.

In the last pay talks in late 2022, IG Metall and employers agreed on an 8.5 percent raise spread over two years, plus one-time payments totaling 3,000 euros (about $3,200) to help cushion the impact of soaring inflation. The German government supported these tax-free payments to mitigate the effects of rising prices while avoiding an inflationary spiral.

This time, IG Metall is calling for a seven percent raise with a one-year deal. While acknowledging that some companies face volatile situations, the union argued that the industry's overall stability and improving economic outlook justify the demand.

In Germany, wage agreements are typically negotiated between employers' organizations and unions, covering entire sectors. A deal reached in one region usually sets the standard nationwide. IG Metall's current agreement expires at the end of September.

Germany's annual inflation rate was 2.4 percent in May, a significant drop from nearly 9% at the beginning of last year. Despite this, the country's economy, the largest in Europe, has struggled to grow. Employers have argued that the current economic situation does not support significant wage increases.