Wage increases for German workers should be limited to 3 percent this year to avoid the risk of causing an inflation spiral, Michael Huether, head of the IW economic institute, was quoted as saying by Boersen-Zeitung.
Higher pay raises may lead companies to leave the collective-bargaining system and hinder efforts to lower unemployment, the German newspaper reported today, citing an interview with Huether. Cologne-based IW, or Institut der deutschen Wirtschaft, is funded by German business.
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