German Chemical Industry Suspends Pay Talks Due to War in Ukraine

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FRANKFURT—Germany’s chemical and pharmaceutical industry on Tuesday agreed a lump sum payment for workers and put further collective wage bargaining on hold, citing uncertainty stemming from Russia’s attack on Ukraine.

Instead of the usual percentage increase, drug and chemical makers agreed to pay workers 1,400 euros each ($1,534), with companies below a certain profitability threshold paying only 1,000 euro per worker, the employers group and trade union IG BCE said in separate statements.

Wage talks for the 580,000 employees are due to resume in October, they added.

“The ramifications of this war will pose big challenges for our industry for years to come. It’s all the more important that the social partners remain unified,” said employers’ association president Kai Beckmann, who is a Merck KGaA executive board member.

Germany, which relies on Russia for 40 percent of its natural gas and 25 percent of oil needs, has supported Western sanctions against Russia but has balked at the prospect of a near-term energy delivery cuts.

Germany will likely face a steep recession, with the energy intensive chemical industry exposed in particular, if sanctions were extended to Russian gas and oil.

Workers’ purchasing power is already taking a hit from 7.6 percent inflation in March, the highest level in Germany in more than 40 years, as prices of natural gas and oil products soared.

The wage talks were the first due to conclude in an industrial sector in Germany after the invasion of Ukraine.

Germany’s public-sector banks last week agreed to pay their workers 3 percent more from July and another 2 percent more a year later, affecting 60,000 employees.

By Ludwig Burger and Patricia Weiss



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