New Round of Disruptive German Rail Strikes Looms

Germany is bracing for a new round of disruptive rail strikes this week.

Germany is bracing for a new round of disruptive rail strikes this week as a moratorium on walkouts expires without a new wage deal between the state railway operator and a union representing 34,000 train drivers.

Deutsche Bahn, which the government wants to partially privatise by 2009, has for months been locked in a wage dispute with its drivers, who say they are underpaid compared to their counterparts elsewhere in Europe.

After a series of strikes over the summer, the two sides agreed to hold new talks through September, but they have been unable to reach a compromise.

Manfred Schell, head of the GDL drivers' union, has said new strikes look "unavoidable" and he will hold a news conference in Frankfurt on Monday to announce the union's next steps.

At the weekend, Deutsche Bahn personnel chief Margret Suckale said the company had done all it could to try to settle the wage dispute.

"We have emergency plans in place and are readying ourselves for a labour conflict," Suckale told Die Welt newspaper.

Deutsche Bahn had hoped to convince GDL to sign up to a wage deal that it struck with two other unions, which foresees salary increases of 4.5 percent.

Last week, it offered to pay the drivers for an additional two hours' work per week -- which it said would result in bottom-line salary increases of up to 10 percent. But GDL has said the new offer just means more work for the same pay.

Because the union has promised not to strike this Wednesday, a holiday to mark the German anniversary of unification, any new walkouts are expected to start from Thursday.

Transport Minister Wolfgang Tiefensee warned at the weekend that new strikes could have a devastating impact on the economy.

Deutsche Bahn, a transport and logistics giant with tentacles spread across Europe and into Asia and the Middle East, is Germany's largest employer. It transported 1.85 billion passengers last year and brought in revenues of 30 billion euros ($43 billion).

In past strikes, GDL has targeted freight as well as passenger trains, hitting supplies to German manufacturers. The DIW economic institute has estimated that rail strikes could cost Germany 500 million euros a day.

The threat comes amid mounting resistance to a partial privatisation within Germany's Social Democrats (SPD), who rule with Chancellor Angela Merkel's conservatives.

Some fear the plan, which foresees the sale of an initial 25 percent stake, could endanger a national resource if financial investors buy shares and press the firm to focus on profits.

SPD parliamentary leader Peter Struck defended the sale plan on Sunday and voiced confidence that his party would not doom it when it meets next month for a closely-watched congress.

"Everyone knows that the Bahn needs to stay competitive following a liberalisation of the European market, and for that it needs money," Struck told the Welt am Sonntag newspaper. "There is no going back."