European Central Bank President Jean-Claude Trichet has stressed the importance of wage restraint ahead of pay talks in Germany in a magazine interview released today.
He also strongly defended the ECB's independence.
"Wage restraint is and remains important. That applies not just for Germany, but for all Europe," he told Germany's Focusmagazine.
"As representative of the ECB (governing) council, I can say that the measured rise in labour costs in recent years was one of the most important factors for more employment and the reduction of unemployment," Mr Trichet said.
Pay talks for nearly a quarter of Germany's 39 million strong workforce take place in the first half of 2007, and expectations for a significant raise are high after years of wage restraint and a recent sharp acceleration in growth.
Mr Trichet also defended the ECB's independence and its goal of delivering price stability.
French presidential candidates Nicolas Sarkozy and Segolene Royal have both said the ECB focuses too narrowly on fighting inflation.
"Our priority goal is to guarantee price stability," Mr Trichet said. "The Maastricht Treaty calls for full independence of the central bank. According to the treaty, governments may not try to attempt to influence the ECB."