A bit of structural inflation being introduced:

Sarkozy Plans to Index Civil Servants’ Salaries to Inflation

by Helene Fouquet and Francois de Beaupuy

(Bloomberg) French President Nicolas Sarkozy said he’d index civil servants’ salaries to inflation and make good on unpaid overtime hours to improve their purchasing power.

“It’s a fact that some civil servants have lost some purchasing power in recent years,” Sarkozy said today in a speech to civil servants in the northern city of Lille. “We’re going to introduce a purchasing power guarantee” to ensure that pay increases match “at least the inflation rate.”

He reiterated that he wants to reduce the number of civil servants and to use half of the savings for pay raises.

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