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German public sector strike looms
BREMEN, Germany -- Europe's largest economy could face a damaging strike by three million pubic workers after negotiators for German government employers on Monday rejected a compromise wage proposal. Representatives for federal, state and community employers voted unanimously against an arbitrated deal -- reached in early hours of Monday -- and the union responded by threatening job action. Hans Koschnick, who led the mediation talks, said the agreement would have given workers a 2.4 percent wage increase this year and a further 0.6 percent rise from January 2004. The talks between the employers and Verdi -- which represents German nurses, fire fighters, bus drivers and other public servants -- collapsed two weeks ago. Last Thursday, arbitrators were appointed to help the two sides reach an agreement. A spokesman for the Verdi trade union said his members would strike if an agreement to bring Eastern Germany pay inline with their Western counterparts was not reached at talks later this week. "If nothing changes in the stance of the employers towards an equalisation for easterners and pay, then all signs point towards a strike," Verdi board member Kurt Martin said after the arbitration negotiations ended. Germany's last public sector strike was in 1992. Economists believe a strike -- coming after a series of work stoppages last year -- could pull Germany's sluggish economy back into a recession, similar to the one that gripped the country in the second half of 2001. It could also further damage Chancellor Gerhard Schroeder's coalition government, which has been under pressure to turn around the economy. Germany has been plagued by rising unemployment, a slumping manufacturing sector and corporate failures. "Given the current miserable economic situation and with over four million unemployed, a strike is the last thing Germany needs," Dieter Hundt, president of the German Employers' Association, told the Berliner Zeitung daily on Saturday. Germany -- along with many other euro zone countries -- is also struggling to get its budget deficit below the limit of three-percent of gross domestic product set by the European Commission. Any significant pay hikes could make that goal difficult to meet, economists say. Union seeking 3 percent riseThe Verdi union has been seeking a pay rise of up to 3 percent for its members. It also wants wages in the former communist Eastern Germany level with those in Western Germany by 2007. Government employers had offered a two-stage wage increase over 18 months of 0.9 percent followed by 1.2 percent. "I can only hope that industrial peace is maintained and a balanced and financially bearable solution is achieved," Economy and Labour Minister Wolfgang Clement told the Tagesspiegel newspaper in an interview on Sunday.
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