Workers in Cyprus saw their annually collectively agreed wage increase by 2.5% in 2008, up from 2.1% in 2007, according to new research from Eurofound, the Dublin-based EU agency charged with providing European social policy-makers with research data, analysis and recommendations. This is the second lowest increase recorded across all 27 Member States in the EU, only behind Malta and on par with Denmark. The development in Cyprus confirms a trend of wage moderation, similar to that of many former EU15 countries.

The new research from Eurofound concludes that the rate of increase in collectively agreed nominal wage increases rose between 2007 and 2008 rose in 16 countries reviewed across the European Union, and fell in 11. The largest increases were recorded in Latvia (23.8%), Lithuania (20.6%), Estonia (16.4%) and Romania (15.9%), and the lowest were recorded in Malta (1.8%), Cyprus (2.5%), Denmark (2.5%), Germany (2.9%), and Portugal (3.1%) and Austria (3.1%).

Collective bargaining plays a relatively significant role in pay setting across Europe. New research from Eurofound’s concluded that average collectively-agreed nominal wage increases across the EU fell from 6.2% in 2007 to 6.1% in 2008. In the former EU15, the average increase in 2007 stood at 3.3%, rising to 3.9% in 2008. In the ten new EU Member States, the average increase was 10.2% in 2006, falling slightly to 9.2% in 2008. When the newest members Romania and Bulgaria are added to the ten new Member States, the respective figures were 11.9% in 2007, falling to 10.1% in 2008.