Germany's lawmakers raised their pay for a second time in six months, snubbing the European Central Bank's calls for wage moderation as they awarded themselves increases that outstrip inflation and the pay gains of millions of workers.

The new pay scales agreed by Chancellor Angela Merkel's coalition will push the monthly salaries of the 613 legislators in the lower house of parliament in Berlin to 8,159 euros ($12,660) by January next year. That gain, the most generous in the public sector this year, amounts to about 16 percent, and has alarmed inflation watchers who say politicians should set an example.

Rising food prices, record prices for oil and the largest union-brokered wage increases since the start of the decade may force the ECB to raise the benchmark interest rate at a time when slower global growth is damping demand for cars and chemicals made in Germany. ECB President Jean-Claude Trichet said last week policy makers are ''paying particularly close attention to wage negotiations in the euro area.''

Lawmakers "are naive to think this won't send an unfortunate ripple across the economy,'' said Eckart Tuchtfeld, a Frankfurt- based economist at Commerzbank AG. "It tells unions it's OK to seek big pay increases again and confirms central bankers' fears that we're on the brink of a wage-price inflation spiral.''

Trichet's Example

Trichet said on April 10 that he's "always recommended moderation'' in wage-setting to help combat inflation. "This recommendation was for all countries and all social partners in the euro area.'' The central banker set an example last year by accepting a 2 percent pay increase, less than the rate of inflation. Trichet's base salary rose to 345,252 euros from 338,472 euros in 2006.

Other ECB policy makers including Axel Weber, Juergen Stark and Yves Mersch have suggested the bank's key rate of 4 percent may not be high enough to rein in inflation, which accelerated to a 16-year high of 3.6 percent in March.

Wages, adjusted for inflation, rose by an average of 1.4 percent last year, less than the growth in consumer prices, the Federal Statistics Office said. Private consumption slumped by 0.8 percent after a 3 percentage-point increase in sales tax.

Backed by politicians, including Social Democrat leader Kurt Beck, Germany's largest unions have pressed their wage demands this year. In March, Ver.di, Germany's second-biggest union, won a deal for 2.1 million public-sector staff that it said was worth 8.9 percent over two years. IG Metall, the biggest union, won 5.2 percent more pay for 14 months for steel workers at companies such as ThyssenKrupp AG. That's the biggest pay increase in 16 years.

Executive Pay

Beck's party on April 28 proposed reining in pay increases for executives at companies listed on the benchmark DAX stock index. Top managers' raises averaged almost 12 percent last year.

Parliament in November, mulling lawmakers' first pay increase since 2003, said the public servants merited "appropriate'' pay to enable them to carry out their mandate.

The lower chamber resolved that month to index their salaries to the pay of federal judges, permitting regular increments for the first time. Pay was lifted 9 percent in two annual steps that month, followed by a 6 percent increase today. Parliament must still formally vote on the decision, reached by the two parties of the governing coalition today.

"I believe it's appropriate if lawmakers in Germany are paid the same as judges,'' Hartmut Koschyk, a legislator with the Christian Social Union party, the Bavarian sister party of Merkel's Christian Democrats, said in an interview.

Opposition lawmaker Bodo Ramelow, deputy chairman of the Left Party, who said today he "cannot accept'' that his raise exceeds the monthly benefit for someone unemployed for more than a year. Basic welfare, excluding payments for rent and child support, will rise by 4 euros to 351 euros on July 1.

Taxpayers are also vexed by lawmakers' wage gain, said Karl Heinz Daeke, president of the BdSt taxpayers' association representing about 350,000 members. The cumulative increases are "just downright outrageous,'' Daeke said on N24 Television. "I thought it was April Fools' Day.''