German public sector employers have launched arbitration proceedings after inconclusive talks in the dispute with unions over pay, effectively suspending strikes that have hit the transport sector until after the busy Easter holiday period.
A third round of negotiations with unions Verdi and dbb followed strike action on Monday that brought railways and airports to a near-halt in Europe's largest economy. It was the country's largest walkout in over three decades, according to Verdi.
The negotiations, in which unions are seeking a 10.5% pay raise for around 2.5 million workers, ended late on Wednesday without result, both sides said, prompting public sector employers to announce that they would launch arbitration.
"Despite clear movement, the employers were not prepared to make sufficient concessions to the employees on the minimum amount," said Verdi chief Frank Werneke.
Employers had hoped that an additional tax-free one-off payment of 3,000 euros ($3,260) to compensate for inflation would sweeten their existing offer of an 8% pay raise.
Consumer prices surged by 9.6% in Germany in 2022, although price pressures have eased in recent months after a winter energy crunch failed to materialise and as supply chain problems abate.
"We went a long way towards accommodating the unions," said Interior Minister Nancy Faeser, the government's chief negotiator. "But the unions were not ready for an agreement. We must initiate arbitration."
This process, which unions are bound to, puts a halt on any strike action for the coming weeks, until a commission of representatives from both sides and independent observers presents its proposed solution, expected some time in the second half of April.
This shields the busy Easter travel period next week from disruption, but more strikes loom if unions and employers fail to agree with the commission's help.
"It should be clear that employers will have to dig deep into their pockets," VP Bank chief analyst Thomas Gitzel said.
($1 = 0.9228 euros)
(Reporting by Holger Hansen and Klaus Lauer; Writing by Rachel More; Editing by William Mallard, Friederike Heine and Alison Williams)
