Trade union and employers representatives have agreed on a collective wage rise of 3.2% over two years for around 220,000 workers, but both sides are unhappy with the outcome.

German inflation for the year to June 2003 was 1%, so the settlement represents an increase in real terms, while The Economists recent poll of forecasters predicted a 0.8% increase in consumer prices in Germany this year and 0.5% next year.

The German rise is broken down to 1.5% in the first year to June 2004, and 1.7% in the second year. The GPMU and BPIF settled on an above-inflation 2.8% annual increase in this years UK National Agreement.

The German deal was concluded after six rounds of negotiations between trade federation Bundesverband Druck und Medien (BVDM) and print union Verdi. From our point of view the conclusion was too high, said BVDM negotiator Wolfgang Puetz.

The Verdi unions chief wage negotiator, Frank Werneke, said it could not ignore the difficulties the industry faced, but said the wage agreement was still unsatisfactory.