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Thursday, 2 May, 2002, 13:57 GMT 14:57 UK
Strikes return to Germany
IG Metall members at the picket line in 1995
Last seen in '95: German metal workers on strike
Germany is bracing itself for the country's first large-scale strike in seven years, after the IG Metall union called on 50,000 workers to down tools on Monday.

The one-day strike at 21 firms in the south-west of the country will be the first in a series of walk-outs.

Later in the week the union plans to target another 60 firms in eastern Germany.

We will strike above all where the employers will quickly feel heavy economic pressure

Klaus Zwickel, IG Metall
The union is demanding a pay rise of 4%, saying that despite wage restraint in the past employers have not met their promise to create extra jobs.

The labour dispute comes amid warnings that prolonged strikes could threaten Germany's still-feeble economic recovery, while the European Central Bank cautions that generous pay deals could stoke inflation.

Secret strike targets

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

Union officials emptying ballot box in strike ballot
In a secret ballot, union members gave strike action their overwhelming support
The union has refused to say which companies will be hit by the walk-out.

However the strike is likely to be felt beyond the 21 targeted firms because many manufacturers depend on just-in-time delivery of parts.

Among the likely targets on the first day of strikes are industrial heavy-weights like DaimlerChrysler and Porsche.

Klaus Zwickel, who heads IG Metall, said: "We will strike above all where the employers will quickly feel heavy economic pressure."

Germany's employers have offered the union a two-part deal spread over 15-months.

They have promised a one-off payment of 190 euros for the first two months, and a pay rise of 3.3% for the next 13 months.

At the same time Gesamtmetall, the metal industry federation, has threatened lock-outs if the strikes escalate.

Election year

Pay deals in the metals industry have a wider importance, as they tend to set the tone for settlements in other industries.

And the strike could well be affect the future of Chancellor Gerhard Schroeder, who faces a general election this September.

Already, economic issues have moved to the top of the election agenda.

Strike wins strong support

On Wednesday, IG Metall announced that 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, and it is here that the first strike has been called.

The IG Metall ballots followed the collapse of pay talks on 19 April, when employers rejected the union's revised demand for a 4% wage increase - down from an earlier call for a 6.5% rise.

Bosses alarmed

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.

On Thursday, European Central Bank president Wim Duisenberg warned yet again that the "outcome of the ongoing wage negotiations in some regions of the euro area could become a matter of concern."

Mr Duisenberg added: "I'm sure that in Germany they perfectly understand what I am alluding to."

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

Thomas Knipp, Germany's Handelsblatt newspaper
"The automotive industry will be possibly hit the hardest"
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:

01 May 02 | Business
German strike threat looms
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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