Agence France-Presse . Frankfurt

The German trade union IG Metall and steel companies agreed late Tuesday to a 5.2 per cent pay raise for steel workers, IG Metall said.

The increase is to take effect on March 1 and remain valid until March 31 2009, the trade union said. In February, 85,000 steel workers in three northwestern German regions would also receive a bonus of 200 euros ($300) under terms of the agreement.

'The steel industry's good situation will also benefit workers in a sustainable way,' commented Oliver Burkhard, the lead union negotiator.

Wage talks are also currently under way in other sectors of the German economy, the biggest in Europe. Services union Verdi has called for an eight percent increase, following several years of wage moderation and solid economic growth.