E German workers on strike

IN WHAT many observers condemned as an act of collective kamikaze, tens of thousands of eastern German engineering and steel workers went on strike yesterday in protest over their employers' refusal to stick to agreements granting them pay rises of more than 20 per cent.

The strikes, organised by the powerful IG Metall engineering union, were confined to one- or two-hour stoppages at factories throughout the region. With more planned for today, union officials warned that it might ballot its members on whether to launch a full-scale strike - the first in eastern Germany since the 1930s.

Deals struck in 1991 were designed to bring pay levels in the east gradually up to parity with those in the west by April next year. Steel-workers in eastern German were due an increase of 21 per cent from the beginning of this month, while metal and engineering workers expected 26 per cent - bringing them up to 80 per cent of their western counterparts.

With Germany in economic recession and productivity in the east still lagging 70 per cent behind that in the west, the employers unilaterally announced earlier this year that they were breaking the agreements, offering instead wage increases of 9 per cent - just over the expected rate of inflation in eastern Germany this year. 'It is an outrage. The employers make promises and then don't keep them,' said one striker outside a Brandenburg steel works yesterday.

While such anger is understandable, employers' representatives have pleaded with the workforce not to push for wage rises that could result in even more closures of the region's mostly unprofitable factories and deter many would-be investors.

Hans-Peter Munter, the main negotiator for the metal employers in Saxony, said the 1991 pay agreements had been signed at a time when predictions of productivity growth in the east had been more optimistic and were based on the assumption of continuing orders from the Soviet Union worth billions of marks a year.

With the collapse of much of the trade with the former Soviet countries and a downturn in the west German economy, hundreds of thousands of east Germans have lost their jobs over the past two years as enterprises have been closed down or pared back.

View from City Road, page 24

Realism on German wages, page 26