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Thursday, 20 June, 2002, 10:30 GMT 11:30 UK
German builders' strike spreads
Striking worker in Hamburg
Construction workers want a 4.5% pay rise
German construction workers said on Thursday they had extended their four-day-old strike to all regions of the country as stoppages in the service sector also gathered pace.


The entire nation has now been drawn into the strike but we can still raise the pressure a lot further

Dietmar Schaefers, IG Bau union
IG Bau union strike leader Dietmar Schaefers said about 18,000 of the country's 950,000 construction workers were involved.

The strike is the first in the industry since World War II, and is thought likely to harm Chancellor Gerhard Schroeder's chances of re-election in less than three months' time.

Bank staff belonging to the Verdi services union also walked out on Wednesday in North Rhine-Westphalia, and the union said shop workers in Hamburg would do the same on Thursday.

'Madness'

All the strikers are seeking pay rises, possibly inspired by the IG Metall factory workers' union which won a 4% rise after 10 days of strikes in May.

Worker wears a shirt saying he is ready for action
The shirt says: "Ready for action"
"The entire nation has now been drawn into the strike but we can still raise the pressure a lot further," said Mr Schaefers, adding that more construction sites would join the strike as the day wore on.

The IG Bau union represents about 340,000 workers in an industry that has shrunk by around 20% since 1995, dragging down the wider German economy.

Thomas Bauer, the employers' chief negotiator, called the strike "madness", saying it would accelerate the sector's decline.

Many building firms are facing bankruptcy, the result of one of the deepest recessions the German construction industry has ever known.

Earlier this year, Philipp Holzmann filed for insolvency in one of Germany's largest ever corporate failures.

East-west wage gap

Mr Schroeder's conservative challenger for the chancellorship, Edmund Stoiber, launched a bitter attack on his rival's economic record this week, saying that Germany led international league tables only for bankruptcies.

Tepid economic growth and chronically high unemployment have also provided him with powerful ammunition.

IG Bau is seeking a 4.5% annual pay increase and wants wages in poorer eastern Germany brought up to the level of those in the west.

A construction worker in western Germany makes an average hourly base wage of 13.45 euros ($12.64), while in the formerly communist east the average hourly wage is 9.81 euros ($9.22).

Employers have offered increases of 3% for the period from September 2002 until March 2003 and of 2.1% for the following 12 months.

The bank staff who went out on strike on Wednesday are seeking a 6.5% rise.

The Verdi union represents 460,000 bank employees, and has rejected employer proposals to introduce a pay system based on merit.


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