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Germany: Last Ditch Effort Underway To Avoid Labor Strike

Munich, 16 February 1999 (RFE/RL) -- Germany's biggest labor union and employers begin a last round of wage negotiations today in an effort to stave off a threatened strike which could damage the country's stagnant economy.

An arbitrator, Hans-Jochen Vogel, has until midnight tomorrow (Wednesday) to find a compromise between the employers and the I.G. Metall labor union. Otherwise, the union says it will hold a vote next week on whether to call a strike of industrial and electrical workers in the province of Baden-Wurttemburg, the heart of Germany's automotive and high-tech industries.

A strike would hit some of Germany's biggest exporters on which the country depends for its economic well-being. They include car-makers such as Daimler-Benz and Porsche and a leading producer of electrical equipment for industry, Robert Bosch.

Industrial analysts say a strike would be a major blow to the Government's campaign to reverse Germany's high level of unemployment, which rose again last month and is now around 11.5 per cent.

The dispute is over wages. I.G. Metall's chief negotiator, Juergen Peters, argued in a television interview yesterday that the German automobile industry and other industries are now making high profits and can afford a generous wage increase for its workers.

Some analysts believe the talks today and tomorrow should be able to reach compromise because the parties are reportedly only about one per cent apart in their positions on wage increases. But as of last night the spokesmen for both sides declared that there was no further room for compromise.

When negotiations began at the beginning of the month, I.G. Metall demanded a 6.5 per cent increase. Some union spokesmen say it has now scaled this down to about four per cent. Industry originally offered 2.8 per cent but has gone up to 3.3 per cent in the negotiations. The employers� federation says industry may also offer workers a one-time lump sum depending on the profitability of individual enterprises.

The stakes are high. Officially, I.G. Metall is negotiating only on behalf of its 3.5 million members. In practice, if I.G. Metall wins a big wage increase, Germany's other 14 labor unions will also seek big increases in their own negotiations. I.G. Metall traditionally sets the benchmark followed by all other unions.

The Industry Minister, Walter Riester, says the country cannot afford a large wage increase if its industries are to compete internationally. Riester and the employers' representatives argue that a big raise would lead to a dangerous new increase in unemployment.

They say it will also put at risk the tripartite negotiations between the Government, labor unions and employers which are supposed to find ways to cut unemployment.

The chief negotiator for the Gesamtmetall employers� federation, Werner Stumpfe, told reporters at the weekend that 3.3 or 3.4 per cent was the maximum the employers could offer. He said industry "cannot go any higher without putting jobs at risk".

The industrial unrest comes at an unfortunate time for the new Government led by Gerhard Schroeder. Schroeder came to power last September after an election campaign in which he repeatedly criticized the previous Chancellor, Helmut Kohl, for failing to reduce unemployment. Schroeder promised more effective policies.

But last week, the Federal Labor Office reported that the number of unemployed jumped to 4.45 million in January -- up from some 4.2 million in December. It has now reached an average of 18.9 per cent in the five former communist provinces of eastern Germany and an average of 9.7 per cent in western Germany. Analysts acknowledge that unemployment always rises in winter but argue that the figures show the situation is not improving.

Chancellor Schroeder has shown his concern by writing to both the labor union and the employers� federation urging a compromise which would avoid a damaging strike. Whether his arguments prove persuasive will be shown in the negotiations today and tomorrow.