Add Labor Unrest to List of Schröder's Woes

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Add Labor Unrest to List of Schröder's Woes

By MARK LANDLER

NY Times, December 19, 2002

BERLIN, Dec. 19 — To the laundry list of woes afflicting Chancellor Gerhard Schroder of Germany, add one more: a potential strike by three million public-service workers.

Negotiations between the government and Germany's largest union, Verdi, broke down early this morning, after they could not agree on a wage increase for the union members, who include bus drivers, garbage collectors, kindergarten teachers, and workers at the opera.

The two sides agreed to bring in mediators to settle the dispute, which escalated this week as the union called warning strikes in Berlin, Munich, and other cities, causing widespread havoc in public transportation and shutting down Frankfurt's airport for a few hours on Tuesday.

Union officials said if a settlement is not reached by mid-January, Germany could face its first national strike since 1992, when garbage piled up and the cities were brought to a standstill by a 12-day halt in work.

"The employers have paved the way for conflict, and a conflict they'll get," said the union's leader, Frank Bsirske, after negotiations in the central German city of Kassel collapsed after 15 hours.

Mr. Bsirske is demanding a pay increase of slightly more than three percent. The government, pleading penury because of a poor economy and spiraling budget deficit, is offering less than one percent. Mr. Bsirske dismissed that as "a provocation that doesn't even offer the prospect of a result," though the union will suspend further work action during the arbitration period.

Strikes are rare in Germany, unlike in France or Italy, and some experts predicted that this one will be averted. The government's finances are so straitened that it would have to offset a wage increase with layoffs.

"The government has no room to maneuver," said Rainer Schmidt, a labor economist at the IFW institute in Kiel. "There's no logic to Verdi's demands. It's merely a strategic move."

The strategy, he said, is to ratchet up the pressure on Mr. Schroder's coalition government in advance of elections next February in the provinces of Lower Saxony and Hessen. Union leaders calculate the government will not want mountains of garbage in the streets the month before the vote.

Mr. Schroder has already suffered a precipitous decline in popularity since he was reelected by a narrow margin last September. A poll issued today by a market researcher, Infratest-Dimap, said that one-third of Germans do not think the government will survive until the next election in 2006.

Labor experts said they expected the chancellor's chief negotiator, Otto Schily, the interior minister, to make a marginally better offer. If it is too generous, however, some economists warned it would push Germany's budget deficit for 2003 above the ceiling set by the European Union.

"I don't think the union is taking enough account of the difficult state of public finances," an exhausted Mr. Schily said this morning.