GERMANY’S powerful metals and engineering union IG Metall is set to demand an 8 per cent pay increase for 3.6 million workers as Europe’s biggest economy faces rising inflation, Tony Burke reports. 

The union, which represents workers across the auto, aerospace, engineering and electrical industries, sets the pace for many other key industries in Germany.

Employers must now do their part to relieve household incomes, IG Metall president Joerg Hofmann said, as inflation in Germany hits highs not seen in decades.

German consumer prices rose by 7.6 per cent on an annual basis in June, driven by rising energy costs in the wake of the conflict in Ukraine.

“Companies can pass rising costs on, not employees,” Mr Hofmann said, adding that the “vast majority” of businesses were in good shape and had full order books.

The union’s 8 per cent claim is the biggest for the sector since 2008 with negotiations due to start in mid-September.

The head of German employers’ federation Gesamtmetall, Stefan Wolf, accused IG Metall of being “blind” to the problems faced by industry.

IG Metall traditionally negotiates an agreement in one of its strongest industrial regions backed up by warning strikes and rallies.  

Any deal then normally flows through the metalworking and electrical sectors.