Germany faces a major national strike if leaders of the powerful IG Metall union call for industrial action as expected at a meeting in Frankfurt today. The strike threat comes after pay talks collapsed last week.
If the union votes in favour of industrial action, three million workers in the engineering, auto and electrical industries could strike from May 6th, the first such strike in eight years.
The union began pay talks demanding 6.5 per cent but during negotiations said they would accept an offer over 4 per cent. Union negotiators walked out of talks rather than accept the employer offer of a 3.3 per cent pay rise over 13 months and a one-off payment of €190.
Employers have been taken off-guard by the union's strike plans and have withdrawn their undertaking not to retaliate with lockouts.
The looming strike presents a headache for the Chancellor, Mr Schröder, who faces re-election in September. By intervening to halt a strike, he risks alienating IG Metall, whose members' support he needs to be re-elected. But he could lose votes by doing nothing and letting Germany's economy deteriorate further.
The economy is already in recession and unemployment is stuck at four million, or 10 per cent of the workforce. Further economic gloom would not just cost Mr Schröder votes, but would also drag down the rest of the euro zone.
