German Labor

Back in the Game

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DGB protestors at a peaceful demonstration in Frankfurt yesterday.
  • Why it matters

    Why it matters

    German unions are regaining strength in Germany, posing a threat to corporate profits and the country’s economic development.

  • Facts

    Facts

    • German unions including ver.di and IG Metall and union association DGB supported protests in Frankfurt on Wednesday.
    • A new round of strikes is hitting Lufthansa this week, leading to dozens of cancellations.
    • Railway operator Deutsche Bahn has been forced to cancel services last year due to repeated strikes.
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    Audio

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Scenes of violent protest — like the one yesterday around the European Central Bank headquarters in Frankfurt that injured more than 200 people, including 90 police — are common in Europe.

But the chaos unleashed by radical leftists in Germany’s financial capital overshadowed a peaceful protest by some 17,000 people, many of whom may ultimately have a longer-lasting influence over the course of European monetary policy — German unions.

After a largely ignominious decade in which they ratcheted down their demands and rhetoric, German unions, experts say, are back in the country’s political equation — at a time when leftist-led governments in southern Europe are pushing for many of the same labor-friendly reforms.

Wednesday’s “Blockupy” demonstration was organized in part by the Deutsche Gewerkschaftsbund, or DGB, the group association of German unions, which with other labor groups strongly condemned the violence that ravaged the center of the city on the Main River.

After sacrificing wage demands for job security, German unions are becoming increasingly assertive and strike-friendly, behavior more commonly found in neighboring France.

“The unions have gained political power – at least at the moment.”

Claus Schnabel, Professor, Chair of Labour and Regional Economics, University of Erlangen-Nuremberg

Unions have repeatedly struck Lufthansa, the country’s top airline, in a bitter dispute over pay. Long-haul flights today were affected across the country in the nearly year-long dispute.

Tomorrow, short-haul hops will be slowed or cancelled across Germany. But it’s not just the aviation industry. Train conductors at Deutsche Bahn are also at odds with the railroad.

School teachers in Germany have staged strikes over the past few weeks to protest low pay and a lack of permanent contracts. The metal workers union, IG Metall, has negotiated a 3.4 percent wage increase, a significant improvement over previous agreements.

“The unions have gained political power – at least at the moment,” said Claus Schnabel, Professor, Chair of Labour and Regional Economics, University of Erlangen-Nuremberg.

“How this will look in the long term? One could argue about that. But at least they are seen as serious political actors again.”

 


Video: Police dispersed protestors in Frankfurt on Wednesday.

 

The Social Democrats are the junior party in the governing coalition of Chancellor Angela Merkel but they have managed to push through many pro-labor proposals such as a minimum wage and lowering the retirement age to 63.

The SPD hopes that by championing labor-friendly legislation in the current government should help smooth relations between the unions and the party, which has come under pressure from the tough labor market reforms that the party pushed through a decade ago.

With an unemployment level of 4.7 percent, the lowest rate in more than two decades, and stable economic growth, unions have gained some more bargaining power.

“Our recent study showed that organized labor is gaining political relevance again – statistically this is correct, but I am skeptical about whether this will last,” said Hagen Lesch, a professor at the Cologne Institute for Economic Research, Collective Wage Policy and Labour.

 

Blockupy Frankfurt
Setting cars aflame to fight austerity. Source: AP

 

“Since the outbreak of the financial crisis, unions have gained visibility in the political process again and have gained approval in society generally. Before the crisis, their demands and the issues they were tackling were seen as outdated,” Mr. Lesch told Handelsblatt Global Edition.

Achievements such as the minimum wage, however, were no reason for unions to rest on their laurels.

“The minimum wage was certainly our biggest achievement in the past decades but it is now at risk,” said Jan Jurczyk, a spokesperson of union ver.di.

“The last three months have shown that the minimum wage is at risk of being overthrown by the country’s private sector which has fought against the additional bureaucracy that the minimum wage has created. The minimum wage needs to be actively defended,” Mr. Jurczyk said.

The Frankfurt department of union association DGB, which represents major unions such as IG Metall and police union GdP, was one of the organizers of the peaceful demonstration in Frankfurt on Wednesday afternoon.

“We have demonstrated in favor of a social Europe, and against the measures taken by the troika,” said Harald Fiedler, chairman of the Frankfurt union association.

The troika is the group of the ECB, European Union and International Monetary Fund, which is currently monitoring whether Greece meets the required budget cuts and reform efforts. The troika also represents the creditors, which have together almost lend €240 billion to Greece.

“The troika’s violation of labor agreements and social laws – it has to made clear that what is happening in Greece should not be allowed to happen. Who knows where it will happen next?” Mr. Fiedler told Handelsblatt Global Edition.

 

Organized Labour in Germany-01

 

Ms. Merkel, speaking in German parliament on Thursday, repeated her line that Greece needed to stick to austerity.

“Obligations to bring its budget in order, to reform and to work towards a position that one day it will no longer need help – it’s the only way it will work,” Ms. Merkel said.

She did not speak of the violent protests in Frankfurt but the vice-chancellor and economics minister, Sigmar Gabriel, did. He said the protests showed a lack of understanding and an “intellectual failing” since the ECB was doing so much to hold Europe together. While that mistake could be forgiven, the violence could not, Mr. Gabriel said.

Union association DGB and Blockupy also condemned the violence.

“It is completely counter-productive when rampage takes place and police are attacked,” Mr. Fiedler of the union association said on Wednesday during the group’s demonstration in Frankfurt.

Blockupy spokesperson Frederic Wester told broadcaster ZDF: “Such an escalation was not our aim. These our not the images we had wished for and are not where we stand for as alliance.”

 

Gilbert Kreijger and Sarah Mewes are editors at Handelsblatt Global Edition in Berlin. Siobhán Dowling of the Global Edition and Carla Neuhaus, a Tagesspiegel reporter, also contributed to this article. To contact the authors: kreijger@handelsblatt.com and mewes@handelsblatt.com

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