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Germany Looks to Create New Jobs

January 25, 2002

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BERLIN (AP) _ German industry and union leaders met Chancellor Gerhard Schroeder on Friday to seek agreed ways to create jobs, but there was little sign that the struggling forum would produce a breakthrough for Schroeder in his election-year battle against stubborn unemployment.

The meeting of the ``Alliance for Jobs″ _ revived after a 10-month gap as Schroeder faces pressure over an unemployment rate of nearly 10 percent _ has threatened to founder as unions and industry clashed over what the talks should address, while unions press for hefty pay increases.

Schroeder’s spokesman, Uwe-Karsten Heye, said the chancellor still expected the meeting to send a signal. ``It’s about making sure that all sides are encouraged to take on the problems of the labor market,″ he said.

Employers’ representatives and unions expressed little readiness to put aside their differences.

Employers want to discuss wage restraint, a call rejected by the unions. Labor has ignored calls from Schroeder to back off demands for pay hikes of up to 7 percent. The demands could clash with efforts by the European Central Bank to get inflation down.

Unions argue that inflation-busting increases are needed to reward higher productivity, compensate for inflation and make up for small increases in the past.

The Saxony state branch of the powerful IG Metall union on Friday followed other branches in demanding a 6.5 percent raise in this year’s round of pay negotiations. The state chairman of the union, Hasso Duevel, maintained that ``we are making a contribution to strengthening the domestic economy and therefore toward greater employment″ with the claim.

Schroeder set up the ``Alliance for Jobs″ after his 1998 election to nudge labor and management leaders toward agreed solutions on fighting unemployment. But it has produced only few tangible results and hasn’t met since last March, when the two sides failed to agree on cutting overtime.

Schroeder has been keen to restore his hands-on image in the face of dismal economic data. His conservative challenger in Sept. 22 parliamentary elections, Bavarian governor Edmund Stoiber, is hammering away at the government’s economic record.

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