Some 765,000 employees of Germany's state governments have won an above-inflation, 5.6 percent pay increase over two years. It is the first major wage deal made in Germany this year.
The agreement came after marathon talks between employers and the Verdi trade union. The announcement was made on Saturday by Verdi leader Frank Bsirske, Sachsen-Anhalts state finance minister Jens Bullerjahn and Ilse Schaad, for union GEW in Potsdam, Brandenburg.
The pay deal came for employees, including police officers, firefighters and workers at ministries in all but one of Germany's 16 states. The state of Hesse did not take part in the negotiations because it is not part of the collective agreement.
Chief negotiator Jens Bullerjahn said the deal was a good compromise. Germany's major service sector trade union, Verdi, had initially demanded a 6.5 percent raise over one year.
The agreement involves a 2.65 percent pay rise backdated to January 1, 2013. It will be followed next January by a further 2.95 percent increase. Germany's inflation rate is 1.5 percent.
Germany's recent economic growth has fueled calls for big pay rises after years of relative restraint. In March 2012, federal and municipal employees won a 6.3 percent raise over two years.
jm/jlw (AP, dpa, Reuters)