German rail strike begins to slow Europe's powerhouse

German steelmakers said on Wednesday they were looking at switching more of their logistics to barge, truck and alternative rail carriers amid concern about a seven-day train strike

The strike has paralysed commuter services and disrupted commercial deliveries, raising fears about the power of small but influential unions to slam the brakes on industry in Europe's biggest economy.

The action by the train drivers' union is due to last until Sunday morning, which would make it the longest in the history of Deutsche Bahn, the state-owned operator.

This is the eighth such stoppage by train drivers in 10 months of wage negotiations, and has prompted dismay in a country of usually consensual labour relations. This week, Angela Merkel, the chancellor, in her first comments on the dispute, said the strike was a "serious burden" for passengers and business.

German workers are less likely to strike than their counterparts in Britain or France, according to data gathered by the Hans Bockler Foundation, the research arm of the German trade union confederation.

But industrial unrest in Germany has been growing in recent years.

Strikes by tiny but influential unions have taken a particularly high profile. Last year, Lufthansa, the German carrier, had to cancel 8,600 flights at a cost of €222 as a result of 15 days of strikes by the pilots' union.

Bottlenecks caused by the rail strike could shave 0.1 per cent, or €500m, off German economic activity this quarter, Andreas Rees, chief German economist at UniCredit bank, said in a note to clients. Mr Rees said: "17% of all goods in Germany are transported by railway . . . simply switching over to trucks is probably not possible".

Hans-Joachim Welsch, head of the transport committee at the German Steel Federation, said steelmakers could survive disruption to transport networks for "three to four days" before the situation became critical. The steel industry, which transports about half of its goods and raw materials by rail, is one of Deutsche Bahn's biggest commercial clients.

Mr Welsch told Deutschlandfunk, the state broadcaster, that steelmakers' losses from the dispute are likely to be a "double-digit million" figure. 

He said: "We are considering increasing the proportion of barges, trucks and other rail operators . . . the GDL is hurting its own business and fellow employees." The drivers' strike highlights the strength of small unions which occupy a pivotal role in the economy, and the competitive pressure between German unions to be more militant on behalf of their members.

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The key area of dispute is whether the GDL has the right to negotiate for rail employees who are not train drivers. This demand is being resisted by Deutsche Bahn and the EVG, which has about 213,000 members.

Ms Merkel's government is bringing in legislation that will curb the influence of niche unions. Under a law that comes into force in July, companies will be able to limit wage negotiations to the union with the biggest group of employees.

Courts would be able to rule illegal a strike by a smaller union without bargaining power.

On Wednesday, Deutsche Bahn proposed appointing an independent mediator to help resolve the dispute. The company said that Matthias Platzeck, a former chairman of Germany's Social Democrats, had offered to serve as mediator.

Deutsche Bahn has offered GDL members a 4.7 per cent pay rise and a one-off payment of €1,000. The train strike began on Monday for freight and affected passenger services from Tuesday.

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