The negotiators for the federal states' public employees have reached a compromise that takes into account the major macroeconomic risks. With the astonishingly conflict-free increase in collectively agreed wages of 2.8 percent over a period of two years, the deal has a stabilizing effect. The unions have resisted the temptation to use the inflation rate, which has already jumped to more than five percent, as an opportunity to secure real wages with an even higher table result. This speaks of intact trust in the European Central Bank. Their peaks assure that the high rate of price increase is also due to special factors and will decrease in the next year.

At 2.8 percent, the public service does not set the bar so high that the collective bargaining parties in the private sector get into trouble.

It does not provide them with any reason for expensive overbid competition and thus alleviates worries that German wage policy could further fuel inflation.

The approximately one million collective bargaining employees in the federal states should be satisfied despite the seemingly meager percentage.

You will also receive a substantial one-time corona payment of 1300 euros, tax-free and duty-free.

In addition, some regular allowances are skyrocketing for healthcare workers.

Personnel planning does not become more flexible

This is not a special offer for employers.

For her, consolation lies in the fact that the bonus does not permanently increase the tariff structure and the conclusion provides unexpectedly long planning security.

In view of the pandemic and inflation risks, that is worth a lot.

The unions had finally asked for five percent for twelve months.

The overall package, with costs of more than two billion euros for the countries, is still heavier than would be desirable in view of their deeply negative budgets.

The burden would be easier to bear if the unions had agreed to rules for a more flexible use of the scarce staff.

Unfortunately, this was where their willingness to compromise came to an end.

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