President Christine Lagarde has rejected calls from ECB officials for linking wage increases to inflation, as inflation hit a record level in the eurozone and far exceeds the minimum wage boost this year.
In a May 5 letter to Bloomberg’s staff, Lagarde said she understood that some people were “disappointed” with the increase this year but insisted that future adjustments should be “reasonable”.
Responding to the union’s arguments for linking wage increases to consumer price gains, he stressed that “wage adjustment with inflation is not desirable and is not sought.”
Even beyond its own practices, the ECB is one of the strongest opponents of indexation, a policy that is still used in some countries but was more widespread decades ago.
Lagarde voiced her support after a meeting last week between the board. and staff representatives, to discuss a 1.48% pay rise, which took effect in January.
“I understand that the number has disappointed many of you because of inflation. We understand why inflation worries many of you, as well as many people outside the ECB.”
Source: Capital
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