National agreements are awarding Irish workers the highest pay increases in the EU, according to a new survey. But when these increases are adjusted for inflation, the percentage pay rises are just half the EU average.

The survey examines collective agreements across the EU, including the Programme for Prosperity and Fairness (PPF). Ireland appears top of the league with the first phase of the PPF at 5.5 per cent, followed by Luxembourg with collective pay awards worth 4.3 per cent and Portugal at 3.5 per cent.

The figures are contained in the annual comparative overview of the European Industrial Relations Observatory (EIRO) produced by the European Foundation.

It shows that the UK had increases under major collective agreements worth 3.1 per cent, while German increases were worth 2.4 per cent. The other major economies had increases agreed of 3 per cent for Spain, 1.9 per cent for Italy and 1.6 per cent for France. The average increase for the EU was 3 per cent.

After inflation is taken into account, the pecking order changes significantly. The average increase in real take-home pay for EU workers is 0.4 per cent, but the increase for Irish workers is only 0.2 per cent.

The biggest increase in net pay goes to the UK at 2.3 per cent, followed by Sweden at 1.7 per cent. The Netherlands was the only other EU state where workers received a net increase of more than 1 per cent at 1.1 per cent, after inflation.

The Republic is one of four states where workers received net increases of less than 1 per cent. The others are: Luxembourg 0.5 per cent; Austria 0.5 per cent; and Germany 0.3 per cent.

In all other member-states workers experienced a net decrease in real earnings, ranging from minus 0.1 per cent in Belgium to minus 0.7 per cent in Italy.

The figures reinforce the case made by the Irish Congress of Trade Unions that a pay review of the PPF was needed to compensate workers for last year's high rate of inflation. The EU inflation average was 2.1 per cent in the year 2000. Inflation in the Republic was 5.6 per cent.

During the year Ireland also enjoyed the highest GDP growth rate in the EU at 8.4 per cent, compared with an average of 2.3 per cent.