German strikes put Merkel's coalition under strain

BERLIN, Mar 13 (Reuters) Germany's public sector strikes, now in their sixth week, are developing into a test of union strength and have exposed cracks between the parties in Chancellor Angela Merkel's coalition government.

The dispute over working hours has pitted Germany's biggest union Verdi against municipal and state government employers in the biggest public sector stoppage since the early 1990s.

Tens of thousands of cleaners, nurses, office workers and others have walked out at different times, leaving garbage uncollected, closing kindergartens and interrupting hospital services in 12 states.

Verdi, like other unions, has been struggling with falling membership but is still strongly represented in the public sector, and the dispute has been seen as a test of its power to keep a strong role in a centralised bargaining system.

''I don't think it makes sense to describe this as a fight for survival for Verdi. That's got nothing to do with the reality of the situation,'' said Reinhard Bispinck, from the Economic and Social Research Institute of the Hans Boeckler Foundation, a think-tank linked to the trade unions.

''But it's a very defensive campaign, no question,'' he said.

As the strikes have dragged on, the dispute has become a potentially disruptive force for Merkel's coalition of conservatives and centre-left Social Democrats (SPD), traditionally close to the unions.

Merkel has been careful to keep out of the dispute but Hartmut Moellring, conservative finance minister of Lower Saxony who is leading negotiations for the employers, has taken a hard line, incurring the wrath of Verdi and leading Social Democrats by breaking off talks at the weekend.

HARMONIOUS CLIMATE Kurt Beck, the SPD premier of Rhineland-Palatinate who faces an election on March 26, threatened at the weekend that SPD-led states could pull out of TdL, the umbrella group that represents public sector employers.

Such a move, amid a brewing disagreement over plans to reform Germany's federal structure, would represent a serious break in the harmonious coalition climate that has prevailed since Merkel took office in November.

At first sight, the nub of the dispute -- a demand to increase working hours from 38.5 hours a week to 40 for no extra pay -- appears trivial. Employers point out that this would add only 18 minutes to each working day.

However, it represents an important battle for public sector workers, who have so far held out against the longer hours now common in the private sector.

Bispinck said the increase could be seen as a 10-day cut in annual holidays and pointed out that employers would reap substantial savings if workers gave in to their demands.

Germany's cash-strapped local governments, most struggling with ballooning budget deficits, say the longer hours are needed to help cut costs and get their finances in order.

Verdi says the plan would put an unfair burden on low-paid workers and would destroy up to 250,000 part-time jobs, a figure disputed by many economists.

The union has made offers similar to a widely criticised deal reached in the northern city of Hamburg, in which better paid workers work longer hours, but these have been turned down by employers, opening the prospect of drawn-out struggle.

''It's really about symbolism. The real point is whether they are forced to capitulate on this very symbolic point,'' said Deutsche Bank economist Stefan Schneider.

REUTERS KD RK2140