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International

Labour strike looms over Germany

By Batuk Gathani

BRUSSELS MARCH 26. Germany is on the brink of a new labour crisis as a powerful trade union organisation IG Metall _ the 110-year-old organisation with a membership of 36 lakh workers _ is threatening walkouts if demands for a 6.5 per cent wage increase is not met. Such a steep raise could further erode German companies' competitive edge in the global market place.

Currently, the country's unemployment rate remains static, with some four million workers unemployed. The Chancellor, Gerhard Schroeder, is fighting a desperate political battle on the labour and constitutional fronts in the key election year. The Government is also faced with a constitutional dispute after Mr. Schroeder won a single vote victory on the controversial immigration Bill in the upper House of Parliament. The victory was secured after a stormy debate but its has been challenged by legal experts and the Opposition.

The new law may make it easier for well-qualified foreigners to settle in the country. German companies may prefer to bring in high-tech workers from east European countries, China and India. This is rated as a major Government initiative before the September general elections. With the current recessionary trading conditions, Germany also witnessed the collapse of the country's largest construction company. The economic scenario could be further complicated by the possible strikes next week. Government authorities and the industrial sector are trying to reach a compromise with IG Metall over the issue.

According to European economists, the euro now oversees comparative wage costs across Europe. With high wage demands and rigid labour laws, significant manufacturing jobs in Germany have migrated to Portugal where those in the metal industry work longer hours and are paid less than a third of the wages in Germany . The German authorities are trying to reach a consensus with the introduction of wage contracts with greater internal flexibility.

The intended action of IG Metall can hurt some 22,000 German manufacturing companies in the automobiles, home appliances, computer hardware and machine tools sectors.

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