Germany heads for all-out strike

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THE first all-out strike in eastern Germany for 60 years lurched nearer yesterday as the region's engineering and steel workers voted massively in favour of industrial action.

Despite widespread unemployment, more than 80 per cent of engineering workers in two eastern states, and steel workers throughout the region, supported going on strike against the employers' decision in February to renege on a pay deal.

Franz Steinkuhler, the head of Germany's most powerful union, IG Metall, said 'all dreams had died that IG Metall might not be prepared to fight in east Germany'. The government in Bonn voiced alarm at the prospect of industrial conflict adding to the woes of the economic downturn and the employers' association, Gesamtmetall, called upon the workers to step back from a 'suicidal move' that would destroy jobs.

IG Metall said the strike could begin on Monday if employers did not reverse their cancellation of the contract that would have given eastern metal and engineering workers a 26 per cent wage rise on 1 April. The rise was part of a four-year agreement signed in 1991 on the staged equalisation of eastern Germany's much lower wages with basic levels in the west by next year. Employers tore up the deal, arguing that the desperate situation in the east - where the number of jobs in manufacturing industry has already plummeted by four-fifths since unification - amounted to an economic emergency.

The two sides have indicated a willingness to keep on talking and representatives have agreed to hold a new round of discussions in the eastern state of Thuringia tomorrow.

BRUSSELS - The EC yesterday said it had approved an additional pounds 192m retraining package for the European steel industry, writes Sarah Lambert. But it also said it would block German plans to bail out the eastern German producer, Eko Stahl.

The Commission's efforts to encourage self-regulation have run into problems as the UK, which has already rationalised production, wants the German steel industry, Europe's biggest, to bear the brunt of the cuts.

Germany has said that the big state-controlled steel makers in Italy and Spain should not continue operating as they are in effect bankrupt. Germany risks losing 40,000 jobs under the agreed restructuring plans.