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German central bank chief says higher wages justified, puts raise potential at 3 percent

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BERLIN — The head of Germany's central bank says higher wages would be justified in the country as the economy flourishes, and is putting the potential for raises at 3 percent.

Bundesbank President Jens Weidmann told Wednesday's Frankfurter Allgemeine Zeitung daily it is "in the nature of things and to be welcomed that wages rise more strongly than in times when the German economy was in significantly worse shape."

Bundesbank officials, who traditionally have tended to advocate modest pay settlements, this month have sounded a different note. It comes as the eurozone grapples with an inflation rate that's well short of its target.

Weidmann stressed that the Bundesbank isn't issuing a recommendation and that wage deals have to take account of individual industries' specific situations.

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