POTSDAM, Germany (Reuters) - Two million German public-sector workers will get a pay rise of 6.3 percent over a 24-month period, according to the government official leading the talks, ending a labor dispute that disrupted services across Germany in recent weeks.
Interior Minister Hans-Peter Friedrich, who had led the negotiations with the Verdi union on behalf of the government, announced the breakthrough shortly before 7 a.m. local time (1 a.m. EDT) on Saturday after all-night negotiations in Potsdam, a suburb of Berlin.
Verdi, one of Germany's biggest and most influential unions representing 2 million public-sector workers, had been seeking a 6.5 percent rise. Verdi rejected an offer of a 3.3 percent rise, staggered over two years.
Wage rises in many other euro zone countries have been steeper than in Germany, fuelling the economic divergence that has underpinned the debt crisis in the single-currency area.
The deal ends the threat of a broader walkout following a series of recent warning strikes that have disrupted Europe's largest economy. Overall, wages for some 9 million German workers are up for negotiation this year.
(Reporting By Axel Hildebrand; Writing by Erik Kirschbaum; Editing by Michael Roddy)