In the middle of the energy crisis, the IG BCE trade union and the BAVC employers' association agreed on a new wage package for the 580,000 employees in the chemical and pharmaceutical industries.

As both sides announced on Tuesday in Wiesbaden, it provides for special payments in two tranches of EUR 1,500 per person as tariff inflation money, which are due in January 2023 and January 2024 at the latest.

Also effective in January 2023 and 2024 are table-related salary increases of 3.25 percent each, i.e. 6.5 percent in total.

Both levels of the pay increase have been made more flexible;

they can be postponed by up to three months for economic reasons.

The offer of the federal government to make payments from employers of up to 3000 euros tax and duty-free to relieve people is fully exploited with the tariff inflation money.

In total, special payments and table-based pay increases result in a net reduction of an average of 12.94 percent for employees in the chemical industry; in the entry-level pay group it is 15.64 percent.

"In this historic, exceptional situation with unprecedented inflation rates and the threat of recession, the social partners have taken responsibility for the employees, the industrial location and domestic demand at the same time," said the chairman of the IG BCE, Michael Vassiliadis.

“This deal has a signal effect beyond the industry.

After all, it proves that well-done tariff policy can be a central component of a bulwark against inflation and energy wars for society as a whole.”

"A signal for location and employment"

"We are sending a signal for location and employment: Employers and unions are pulling together in the crisis," comments BAVC President Kai Beckmann.

“The consequences of the war hit our industry particularly hard.

It is all the more important that we bridge the existing differences with a constructive collective bargaining policy.

This is what characterizes the social partnership in our industry.”

In April, employers and unions had initially agreed on a seven-month bridging solution with a one-off payment of 1,400 euros due to the growing uncertainties resulting from the Ukraine war.

Difficult companies had the opportunity to reduce the payment to 1000 euros.

The IG BCE went into the third round of negotiations without a concrete demand, but had insisted on a sustainable table-effective increase in wages.

Originally, the union had sought a wage agreement above the rate of inflation.

At the time of the demand, however, inflation was still significantly lower before it had climbed to new highs as a result of the Ukraine war.

In September, inflation in Germany was 10 percent, the highest since 1951.

The federal government forecasts an average inflation rate of 8 percent this year and 7 percent in 2023.

As the largest industrial energy consumer in Germany, the chemical industry has been severely affected by the exploding energy prices.

Gas is not only the most important source of energy for companies, but is also required in large quantities to produce their products.

They are finding it increasingly difficult to pass on increasing costs to customers through higher prices.

The world's largest chemical group, BASF, was in the red in Germany in the third quarter and last week announced a new austerity program that also includes job cuts.

The chemical industry with 1900 companies is Germany's third largest branch of industry after the automotive industry and mechanical engineering.