Strike Causes Disruptions for Millions
Airports, bus, and train stations across Germany came to a standstill on Monday, disrupting millions during one of the largest walkouts in decades in Europe's biggest economy as soaring inflation stokes wage demands.
Unions Call for Wage Increases Amid Inflation
The 24-hour "warning" strikes called by the Verdi union and railway and transport union EVG were the latest in months of industrial action, which has hit major European economies as higher food and energy prices dent living standards. They kicked off three days of wage talks which could lead to further strikes if they fail to yield a compromise.
Employers' Offer Deemed Unacceptable by Unions
Employers have offered 5% more wages over 27 months and a one-off payment of 2,500 euros ($2,700) - proposals unions call for a double-digit rise, called unacceptable amid inflation which reached 9.3% in February. Verdi demands a 10.5% wage increase, while EVG asks for a 12% raise.
Workers Protest for Better Conditions
Striking workers wearing high-vis jackets blew horns and whistles, held up banners, and waved flags during protests. Verdi Chief Frank Werneke told reporters that employees are fed up with worsening work conditions and vacant posts.
Germany Hit Hard by Higher Prices
Germany, which was heavily dependent on Russia for gas before the war in Ukraine, has been particularly hard hit by higher prices, with inflation rates exceeding the euro-area average in recent months.
Largest Walkout Since 1992
Worsening chronic labor shortages give unions a strong negotiating hand, economists say. The walkout is the biggest in Germany, which has a long history of collective wage bargaining, since 1992, according to Verdi.
Travelers Stranded at Major Airports
The Airports Association ADV estimated that 380,000 air passengers were affected by flight suspensions including at two of Germany's largest airports in Munich and Frankfurt, with stranded travelers sleeping on benches.
Public Transportation Cancellations
Rail services were also canceled by railway operator Deutsche Bahn (DBN.UL). In Cologne, the lack of city trains prompted a dash for taxis. Deutsche Bahn spokesperson criticized the strike as excessive and exaggerated.
Unions Representing Millions of Workers
Verdi is negotiating for around 2.5 million employees in the public sector, including in public transport and airports, while EVG negotiates for about 230,000 employees at Deutsche Bahn and bus companies.
Mixed Reactions from Stranded Passengers
Stranded passengers expressed both sympathy and unhappiness about the strike action. Some passengers, like Lars Boehm, understood the strike while acknowledging the inconvenience it caused.
German Strikes Compared to French Protests
Germany's union strife pales compared to protests against President Emmanuel Macron's pension reforms in France, which have sparked the worst street violence in years.
Central Banks Respond to Cost Pressures
Persistent cost pressures have pushed central banks to a series of interest rate increases, but policymakers say they have not seen signs of a destabilizing price-wage spiral.
Wage Demands Impact Government Budget
Sharp wage increases could squeeze the fiscal room for Chancellor Olaf Scholz's government, making already fractious budget negotiations more difficult. The interior ministry said the demands were equivalent to extra costs of 1.4 billion euros annually.
Employers Warn of Increased Fares
Employers are also warning that higher wages for transport workers would increase passenger fares.
Further Strikes Possible Over Easter
EVG chairman Martin Burkert warned that further strikes, including over the Easter holiday period, were possible. Striking worker Christoph Gerschner noted that people have second or third jobs to make ends meet.
Companies Raising Prices at Consumers' Expenses
Data presented to ECB policymakers last month and reported exclusively by Reuters showed that companies were raising prices over their costs at the expense of consumers and wage earners.
Limited Economic Impact, For Now
Commerzbank Chief Economist Joerg Kraemer said the economic impact of Monday's strike on Germany's 181-million-euro ($194-million)-a-day transport sector was limited so far, but this could change if the strikes persisted. He noted that factories would continue to operate, and many employees would work from home, mitigating the overall economic impact. However, if strikes continue, the losses may extend beyond the transportation industry, potentially affecting the broader German economy.