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Business

Top German Union Talks Tough on Pay

Adding to his economic woes, Chancellor Gerhard Schröder looks set to go into election year 2002 with his wage policy in tatters following news that the chief of Germany's largest union is talking tough on pay talks.

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IG Metall is one of Germany's strongest unions

To add to his economic woes, Chancellor Gerhard Schröder now looks set to go into election year 2002 with his wage policy in tatters, along with his relations with the trade unions, following the news that the chief of Germany's largest union is talking tough in advance of the upcoming round of pay talks.

Klaus Zwickel, head of metals and engineering union IG Metall, said he'll be going into pay talks, due to start Monday, with a clear demand for significant wage increases. After years of pay restraint, he noted a clear readiness among his members to back up this demand with a strike.

The last metals industry strike was in 1995 in Bavaria. Zwickel said the IG Metall executive will put forward a pay claim based on the high figure proposed at regional level. The powerful Baden-Württemberg branch has spoken in favor of a pay claim of 5–7%, while other branches are calling for at least 6%.

Under Germany's system of sector-wide pay bargaining, wage agreements are forged every two years. The last round of pay talks were successful, from the point of view of the government and industry at least, in producing a series of moderate wage increases, thanks largely to a framework accord drawn up at the trilateral Alliance for Jobs talks.

But a government spokesman said on Thursday that the trade unions had informed the government of their unwillingness to participate in Alliance for Jobs talks before the end of this year, meaning that the government will not have access to a key forum for the promotion of the cause of wage restraint.

And Zwickel's latest words make it clear that wage restraint is the last thing on the union's minds anyway. In election year, Schröder's Social Democratic Party (SPD) will want to avoid conveying to the electorate the impression that it cannot control the trade unions, especially since its strong relations with the unions are traditionally held up by the party as a reason for voting for it.

But Zwickel's words on Thursday suggest that an anti-Schröder mood has now taken hold of Germany's largest union. He said he had tried to get IG Metall to agree to the forging of a short-term pay agreement, which would function as a bridging mechanism until the economic picture improves.

He said this had been rejected because members were opposed to the idea of a "bonus for the Chancellor". Zwickel noted widespread disappointment among his members at the economic and social policies pursued by Germany's SPD-led government.