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Wednesday, 1 May, 2002, 08:35 GMT 09:35 UK
German strike threat looms
IG Metall strikers on a march
Berlin-Brandenburg members have come out strongly in favour of strikes
Germany is facing its first major strike for seven years after members of the country's biggest trade union, IG Metall, voted for industrial action over pay.

The action of any walkout could well affect the future of Chancellor Gerhard Schroeder, who faces a general election this September.

And the first signs of a fragile economy recovery could also be snuffed out.

IG Metall said more than 80% of its members in the north-eastern Berlin-Brandenburg region had voted in favour of work stoppages.

In a second ballot, over 90% of members in the Baden-Wuerttemberg region also backed strike action.

Prolonged stoppages at manufacturing powerhouses such as DaimlerChrysler and Siemens would trim Germany's economic growth, still struggling to stay in positive territory after last year's recession.

Pay dispute

The IG Metall ballots follow the collapse of pay talks on 19 April, when employers rejected the union's revised demand for a 4% wage increase.

A vote in favour of industrial action from IG Metall members clears the way for union leaders to order work stoppages.

IG Metall's chairman Klaus Zwickel has said that union leaders plan to launch targeted work stoppages designed to hit major manufacturers while limiting the impact on smaller firms.

IG Metall, with a total membership of about 2.6 million, exerts a powerful influence on annual pay negotiations in Germany's key manufacturing and engineering industries.

Bosses alarmed

The union was demanding a 6.5% wage increase at the start of the latest round of pay talks.

Employers' associations have refused to go any higher than 3.3%.

German economists, politicians and business leaders have condemned the union's stance on pay as irresponsible, arguing that employers cannot afford hefty wage increases until the economy picks up.

Last month, the European Central Bank warned that upwards pressure on wages in the eurozone was "a cause for concern".

Germany is Europe's largest economy, accounting for more than a third of the eurozone's economic activity.

Dr Jurgen Pfister, Commerzbank
"German employees are very angry about the low wage rises in the past and the high increases in consumer prices."
The BBC's Dominic Di Natale
"This comes at a crucial time, just as the nation is coming out of a slowdown"
See also:

17 Jan 02 | Business
Germany on brink of recession
28 Dec 01 | Business
No respite for German economy
05 Dec 01 | Business
Germany's slowdown continues
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