The German Chancellor, Mr Gerhard Schroeder, said yesterday that recent higher-than-expected pay deals for public sector and engineering workers should not jeopardise his government-sponsored job creation plan.

The government-chaired Alliance for Jobs project, which brings employers and unions together to try to find a solution for Germany's chronic unemployment, was a long-term plan and should not be endangered by short-term egotistical goals, he said.

The Chancellor criticised employers for threatening to withdraw from the alliance talks after the pay settlements.

"I didn't sign the engineering deal. There are two signatures there, one from the unions, one from the employers. I don't understand how you can sign a pay deal, then afterwards say to the government, which had nothing to do with it, that the deal was wrong. That is astonishing behaviour," Mr Schroeder said.