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Business

Germany Faces Prospect of National Strikes

Four days of talks between unions and the government wound to a close on Monday without a compromise. Representatives of public-sector workers said they were prepared for a long walk-out.

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Public transit could grind to a halt if talks fail

Germany faced the possibility of the first national public-sector strike in more than a decade as four days of talks between the government and union negotiators ground to a halt on Monday.

Leaders of the Verdi trade union, which represents some 2.8 million public transit workers, nurses, fire fighters and other public employees, said they were prepared for a long strike beginning later in January if no deal is reached at a new round of talks on Wednesday.

The government-appointed mediator, Hinrich Lehmann-Grube, said employers could not accept a proposed compromise that called for wages to increase by 3 percent over the next year and a half. Employers countered with an offer of a 2.8 percent increase.

Schily "moderately optimistic"

"We are still willing to negotiate and I am moderately optimistic that we will come to an agreement on Wednesday," Interior Minister Otto Schily said in Bremen, where the negotiations took place.

Schily warned union members against a strike, saying that the government – already under severe financial pressure due to a sinking economy – would withdraw its latest offer in the case of a walk-out.

Economists, meanwhile, noted that a strike could send Germany's weak economy back into a recession.

"Pessimism could grow "

"I could imagine the strikes to be the last straw," Rainer Schmidt, labor market expert at the IfW economic institute told Reuters. "Expectations are already pessimistic. This pessimism could grow with strikes."

Indeed, union mediator Hans Koschnick urged the government to consider the price of a strike. "If it comes to a strike, that will be much more expensive than what we have proposed," he told German radio.

Verdi has asked for a pay raise of 3 percent to be implemented in two phases over 18 months and for wages in the former East Germany to equal those in the west by 2007.

The last national public sector strike in Germany was in 1992. Workers walked off their jobs for 12 days, bringing public transportation to a halt, leaving garbage uncollected and causing widespread economic problems.

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