Economic damage feared as German rail strike begins

BERLIN, Nov 14 (Reuters) German train drivers started a 62-hour nationwide strike on freight routes today, raising fears about the impact on Europe's biggest economy of a long-running wage dispute with rail operator Deutsche Bahn.

The GDL train drivers' union plans to extend the walkouts -- the biggest strike in Deutsche Bahn's history -- to passenger services from 0630hrs IST tomorrow causing misery to millions of travellers. The freight stoppages started at 0430 IST.

The action, an escalation in the drivers' dispute with the state-owned Deutsche Bahn, coincides with a nationwide strike by transport workers in neighbouring France over pension reform.

''Even without exactly quantifying it, the rail strike does have an economic effect and is a burden on an otherwise positive economy,'' government spokesman Thomas Steg told a regular news conference in Berlin.

Economists say the strike on freight routes costs the economy 50 million euros (73.3 million dollars) a day and that could rise to 500 million euros if the strikes last more than a week.

Deutsche Bahn said goods services in eastern Germany would be hit particularly hard due to the willingness of the workforce there to go on strike and television pictures showed rows of container wagons standing on the tracks at deserted stations.

''This will have a substantial impact across the whole country,'' Deutsche Bahn said in a statement.

It said it was drafting in 1,000 workers to help provide replacement services and it would try to keep international and high speed, long-distance passenger trains running.

GDL, which says its workers are underpaid compared to drivers in other European countries, is demanding that Deutsche Bahn makes a new wage offer so the two sides can restart talks.

SERIES OF STRIKES GDL, the smallest of three rail workers' unions, has staged a series of strikes over the last few months, mostly on local and regional services and has even raised the prospect of open-ended strikes if it sees no new offer.

The union, which has strong public support, wants its own wage deal for its 34,000 drivers, separate from one agreed by the railway's other 195,000 workers in July, which gave them a 4.5 percent pay rise.

The GDL has said it could negotiate its initial demand for a 31 per cent wage increase if it gets its own contract. Deutsche Bahn wants to keep its employees under a sector-wide agreement.

Economists say that if GDL gets its own contract, it could fragment Germany's unions and push up labour costs by encouraging other workers to press for separate wage deals.

With Deutsche Bahn saying it will not be making a new offer, the dispute shows little sign of being resolved soon.

Both stoppages are due to end on Saturday at 0630 IST.

The dispute comes amid difficult discussions on the planned partial privatisation of Deutsche Bahn by 2009. The two ruling parties in Merkel's coalition are wrangling about the details and many experts say the flotation is doomed.

REUTERS PY HT2142