German wage round – approaching its first peak. IGM has started “24h-token
strikes” to increase pressure ahead of the 6th round of talks.
The crunch point remains IGM’s insistence on a partial subsidy in case employees want to
temporarily reduce their weekly working hours to 28. Despite the intensification
of the dispute, there still seems to be willingness on both sides to avoid a
collapse; both have signalled their intention to return to the negotiating table
after Friday, when the current wave of strikes ends. Improved offers by metal
employers and VW support our long-held view that pay increases could be
clearly north of 3%.
Groko formation on the home stretch: Concerns over SPD members’ verdict.
After surprisingly fast negotiations in the past few days, the CDU, the CSU and
the SPD appear to be on the verge of agreeing on a draft coalition treaty. But
SPD leader Schulz will have to go extra miles to enlist his party members’
support in the imminent membership ballot. Despite mixed public sentiment and
the critical SPD youth organisation’s No campaign, the most likely scenario
seems to be a positive result, as in the negotiations the CDU/CSU has
accommodated some of the SPD members’ key requests. Angela Merkel’s re-
election could be carried out by early March – i.e. In time for the next official
European Council meeting.
Should the members’ ballot fail, Germany seems
very likely to go for new elections.