Trade unions across Europe will go on the offensive over pay to get their share of improving economic conditions, the leader of the European TUC said yesterday.

John Monks, the ETUC General Secretary, said that unions throughout Europe were likely to follow moves by their German counterparts and demand substantial pay increases.

He told The Times:“The eurozone is in better shape now than it has been since German reunification. Unions are moving from being on the defensive to being more on the offensive and proactive.”

Widespread campaigns for pay will further alarm the European Central Bank (ECB), which has said that interest rates may have to rise because of German pay increases. Jean-Claude Trichet, President of the ECB, will have a showdown with unions at the ETUC’s conference this month when he faces union leaders from Germany, Sweden and Italy.

Mr Monks said: “Eurozone pay has been flat largely because German pay has been flat, but now German unions are determined to get real pay increases.” He said that the ECB was being shortsighted in trying to curb German levels of pay because more disposable income would stimulate its economy. He said that the country traditionally had been better at exporting than producing for its domestic market.

Last week Unite, Britain’s new “super-union”, said that it would step up pay campaigns to ensure that there is a better balance between returns given to shareholders and employees. In Britain employers have voiced fears that unions will use the increase in inflation to press for higher pay settlements.

European unions will also use the ETUC’s four-yearly conference in Seville to increase the pressure for more accountability and better employment conditions from private equity, amid a flurry of takeovers.

Yesterday union leaders from Europe met Angela Merkel, the German Chancellor, and employment ministers from the G8 group of industrialised countries to raise concerns over private equity and the social costs of globalisation. The unions said that governments had failed to “manage globalisation and have failed to assure that workers participate equitably in the benefits of economic growth”. Mr Monks said that some private equity groups were failing to provide proper pension protection, leaving workers potentially reliant on outside support schemes if the pension plan failed.

The ETUC, which covers unions with 60 million members in 38 countries, is also to mount a recruitment campaign to boost its falling membership levels by targeting migrant workers and agency employees, in particular.

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