The European Central Bank supports Germany's Bundesbank in its appeals for higher wage deals in Germany, Der Spiegel magazine quoted ECB Chief Economist Peter Praet as saying on Sunday. Low wage agreements were needed in some crisis-hit countries in the euro zone to bolster competitiveness, the magazine quoted Praet as saying.
By contrast, in countries like Germany where "inflation is low and the labour market is in good shape", higher earnings increases were appropriate, Der Spiegel reported him to have said.
This would help bring average wage developments in the euro zone in line with the ECB's inflation target of close to 2 percent, his argument continued, said Der Spiegel.
The Bundesbank historically has been a strong advocate of wage restraint, but with euro zone inflation stuck below 1 percent and consumer prices rising just 1.0 percent in June in Germany, Europe's biggest economy, some fear deflation.
Bundesbank Chief Economist Jens Ulbrich has been widely reported by German media to have encouraged German trade unions to take a more aggressive stance in wage negotiations given low levels of inflation.
Labour unions in Germany have been getting above-average pay hikes in the past year after a decade of wage restraint. In April, 2.1 million public sector workers agreed to a 3.0 percent pay rise for this year and 2.4 percent for next.
In February, Germany's 550,000 chemical workers agreed to a 3.7 percent pay hike for 14 months.
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