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BERLIN - Europe's largest carmaker Volkswagen has agreed a wage deal for its staff with trade union IG Metall, a spokesman told Reuters on Tuesday.

Details of the agreement will be unveiled at a news conference IG Metall, Germany's most powerful union, has scheduled for 1000 CET.

The agreement covers about 120,000 Volkswagen employees. IG Metall had asked for a wage increase of 4% and last month dismissed Volkswagen's most recent offer of a 250 euros payment for the first half of 2021 and a wage increase of 1.2% for 2022.

Volkswagen, the world's second-largest carmaker, has seen its shares rise by more than half, shrugging off the impact from the coronavirus pandemic and a chip shortage that has hit the automotive sector.

Employers have warned that hundreds of thousands of jobs could be lost in Germany if Europe's largest economy cannot improve its competitiveness and have said there was limited room for wage increases.