UNIONS and German government officials announced today that they have reached a pay deal for more than 2.5 million public-sector workers, ending a lengthy dispute and heading off the possibility of an all-out strike.

The ver.di union had pressed for pay raises as workers in Germany struggled to cope with the soaring cost of living. 

Interior Minister Nancy Faeser said: “We accommodated the unions as far as we could responsibly do in a difficult budget situation.”

The deal means one-off payments totaling €3,000 for each worker, with the first €1,240 coming in June and monthly payments of €220 following until February. 

In March, regular monthly pay for all will be increased by €200, followed by a salary increase of 5.5 per cent. The deal runs through to the end of 2024.

Ver.di originally sought a one-year deal with a raise of 10.5 per cent. 

Ver.di chairman Frank Werneke said that “we went to our pain threshold with the decision to make this compromise.”

He added that the raises in pay next year will amount to an increase of over 11 per cent for most public service workers.