Germany De-unified

May 09, 1992

So the Wessies got theirs. After months of seething resentment over the costs, the higher taxes, the influx of newcomers and the psycho-social disturbances set off through the reunification of Germany, public employees in western Germany have won what their leader calls a "political victory." After an 11-day strike that shut down transport and postal services and let garbage pile high, they secured the 5.4 percent wage hike a mediator said they should have had in the first place.

So when will the Ossies get theirs? Though no workers in eastern Germany want to go back to oppressive Communist rule, they resent wage rates 40 percent below those their richer counterparts receive in the west. Even more, they resent the condescension they encounter in contacts with their countrymen. The extra $9.75 billion western public sector workers will receive is that much less the Bonn government can spend to rebuild the collapsed economies in the eastern states. This is likely to make wage demands and strike threats of eastern workers that much harsher.

Union leader Monika Wulf-Mathies was quite precise in calling the settlement a "political victory." It was a triumph for her Social Democratic allies and a humiliation for Chancellor Helmut Kohl, the ruling Christian Democrat, who was forced to retreat from his insistence on a 4.8 percent wage boost tied to the inflation rate. Mr. Kohl, his coalition in disarray, had nothing to show for what he had put the country through.

What Ms. Wulf-Mathies did not claim was an "economic victory," which the wage settlement was anything but. It will tend to push German labor costs through the roof, making the country less competitive and its manufacturers eager to locate new plants elsewhere. Mr. Kohl has stated bluntly that Germans have to work harder and longer, while taking fewer holidays, if their country is to prosper. The answer from private sector workers is likely to be a series of strike-threatening demands for wage hikes in the 9-percent range.

These developments are important to Germany's allies because they come at a time when German resources are much needed to bail out the old Soviet bloc and provide non-protectionist leadership in the European Community. With Wessies and Ossies in competition, the prospects are bleak.

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