Strike threat adds to woes of German chancellor

BERLIN -- Talks on settling a pay dispute between German public workers and the government collapsed Thursday, moving the country closer to a crippling strike and a new crisis for Chancellor Gerhard Schroeder.

While negotiators sought arbitration, the two sides remained far apart after union leaders rejected an offer from federal, state and local authorities.

"We're preparing for a long conflict," Frank Bsirske, the head of the service workers union, told ZDF television.

Labor strife is but the latest in a series of setbacks for Schroeder, whose popularity has tumbled since he announced tax hikes and spending cuts to plug a budget hole revealed after his September re-election. The deficit leaves little room for pay raises for almost 3 million civil servants who last went on strike 10 years ago.

An Infratest poll published Thursday said a third of Germans believe he will step down early, while two-thirds said he would survive his full four-year term. The poll had a margin of error of plus or minus 3 percentage points.

Germans got a small taste of the possible strike disruptions this week when limited walkouts halted public transport and forced airlines to scrap hundreds of flights from Frankfurt and Munich.

Germany's main airline, Lufthansa said the walkouts cost it millions of dollars. Any repeat of the last major strike in 1992, when an 11-day walkout left garbage piled in the streets, would be much more costly and could further weaken Schroeder.

Announcing the breakdown of the pay talks with public workers, Interior Minister Otto Schily insisted the money simply wasn't there. Cash-strapped authorities could only fund a more generous offer by laying off staff, he said, complaining of the union's "intransigent position."

Labor unions are seeking a raise of more than 3 percent to prevent pay for workers from garbage collectors to opera employees from falling behind awards in other industries.

Union head Bsirske said employers offered a package running through June 2004 that would include a pay rise of 0.9 percent from January and a 1.2 percent increase from October next year in return for longer working hours.

The offer also fell short of the union's demand for a timetable to bring wages in the former communist east up to the level of those in the more affluent west, he said.

"In effect, they were offering us zero," he said.

Strikes are rare in Germany, where consensus usually dominates labor relations. But this year's pay talks have been tough because of the economic slump and labor's intention to make up for moderate increases in past years.