UPDATE 2-German IG Metall union sees higher wage deal

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By Christiaan Hetzner

FRANKFURT, April 9 (Reuters) - Germany's biggest industrial union IG Metall said it would probably aim for a higher wage deal than last year when it enters wage talks this autumn for the 3.5 million workers in the engineering and metalworking sector.

"If I were to decide on that today, then yes, but we have to see in September," union boss Berthold Huber told Reuters on the sidelines of a news conference on the misuse of temporary labour in Germany.

Coming the same day that the IMF forecast growth in Europe's largest economy would slow to 1.0 percent in 2009, his comments suggest the powerful union might be open to the possibility of a more moderate pay hike should the outlook darken in the coming months when it drafts its demands.

A sharp rise in wages in what is Germany's single biggest private sector deal would add to concerns at the European Central Bank, which has warned of the risks of wage hikes fanning inflation. Price growth is already running at a record high of 3.5 percent in the euro area.

Huber acknowledged that the rapid appreciation of the euro and the possibility of a recession in the United States could complicate the talks.

"Short term no," he continued, when asked whether he was concerned about the economic outlook. "The midterm is the question. There are so many uncertainties."

Despite the unpredictable risks to the German economy on the horizon, particularly for 2009, he said it was too early to say whether the union would push for a one-year deal only.