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Germany

Pay Freeze Sought for Civil Servants

In collective salary talks with unions starting today, the German government will seek to hold salaries where they currently are and introduce performance-related pay for the country's 2.1 million public-sector workers. The wage freeze has been budgeted by Chancellor Gerhard Schröder's government to try and bring Germany's budget deficit below three percent of gross domestic product, as mandated by EU rules. "A pay rise is absolutely not in the cards," Thomas Boehle, the head of the VKA association of local authorities, told Bloomberg. "The public coffers are empty." The government is forecasting economic growth of 1.6 percent this year, a rate that would keep the budget deficit to 2.9 percent of GDP, compared with 3.9 percent last year. But government spending on the unemployed could be higher than anticipated since the jobless rolls surpassed the five million mark in January. Negotiators at Monday's talk will also seek new rules on pay and conditions for employees in several sectors in an attempt to increase efficiency and prevent job cuts.

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