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German wage increases signal good news for Europe

Reuters Breakingviews delivers agenda-setting financial insight. Its global correspondents react to stories as they develop, delivering sharp and provocative commentary on big financial news as it breaks.

German workers fighting for higher pay don’t lack supporters. Economists and politicians across Europe would like to see them spend more, and in return help take the continent’s economy out of the doldrums. As things stand, unions aren’t wildly enthusiastic about excessive pay hikes, and settle for quite reasonable ones. They are happy with pay rises that remain in line with inflation and productivity trends. That will increase consumers’ real spending power without weakening the country’s industrial base. This is better for the German economy, and also for the euro zone as a whole.