Germany’s biggest trade union agreed Friday to hefty wage hikes that are expected to cover almost four million workers facing soaring inflation, averting a major strike in Europe’s top economy. The deal will be closely watched across the continent, as industrial action spreads due to rising costs, particularly of energy, triggered by Russia’s invasion of Ukraine. The agreement for hikes totalling 8.5 percent between IG Metall union — which represents workers in the key metal and electrical sectors — and employers was reached early Friday after weeks of talks and walkouts. The so-called “pilot agreement” in southern Baden-Wuerttemberg state, which is expected to eventually cover about 3.9 million workers across Germany, lays out how the pay increase will be introduced in two stages, in 2023 and 2024. It also includes a 3,000-euro ($3,100) payment to combat the impact of inflation. “Employees will soon have significantly more money in their pockets — and permanently,” said Joerg Hofmann, president of IG Metall, seen as a trend setter in wage negotiations nationwide. The union had initially called for an eight percent increase over 12 months, the biggest hike since 2008. Its members are from a vast range of key businesses, from the automotive to electronics sectors. Workers have been ratcheting up pressure — with demonstrations, and a series of “warning strikes” at the end of October, which are walkouts for a limited duration that often accompany salary negotiations in Germany. If no deal was reached, then the union was poised to launch broader strikes lasting 24 hours.