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German Unions ‘Mobilize’ Resistance to Merkel’s Budget Cuts

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June 8 (Bloomberg) -- Germany’s main labor federation said it will mobilize protests against Chancellor Angela Merkel’s planned budget cuts, which it criticized as unfair to the poor and jobless.

Opposition parties, led by the Social Democrats, also denounced the four-year program to trim 81.6 billion euros ($97.6 billion) in federal spending between 2011 and 2014, presented by Merkel yesterday in a bid to bolster the euro.

“This misguided savings package won’t go without an appropriate response by the unions,” Michael Sommer, head of the DGB labor federation, was cited as saying by the Rhein-Neckar Zeitung newspaper today. “We will also mobilize against the cuts in government jobs. We will use all democratic means at our disposal to influence the legislative budget process.”

Reaction to Merkel’s plan reflects widening resistance to austerity measures as European governments try to reduce deficits and debt that are undermining the euro. Spanish Prime Minister Jose Luis Rodriguez Zapatero is bracing for the biggest strike since his 2004 election and Greece saw violent protests in which three bank employees died in May.

Germany’s ver.di service-industry union will hold a rally against the savings package in the southern city of Stuttgart on June 12, spokesman Christoph Schmitz said in a phone interview. Frank Bsirske, the union’s head, declined to rule out calling for nationwide strikes in an ARD television interview today.

“Once we take this debate to the workplace, we’ll see how the employees react,” Bsirske said.

Merkel is cutting benefits for welfare recipients, parents and the jobless, while leaving contributions by industry and banks vague, said Sigmar Gabriel, Social Democratic Party leader.

“While the most vulnerable are taking the hit, the wealthy and top earners are being spared,” Sommer told reporters.

Labor Minister Ursula von der Leyen said that Germany had no other option than budget tightening given the unfolding debt crisis in Europe.

“We have Greece, Spain and the whole drama in Europe right in front of our eyes,” she said on N24 television. “Germany must save.”

Top German stories: {TOP GER <GO>} Stories on Currencies: {NI FRX <GO>} Europe’s debt crisis: {EXT3 <GO>} Developed Market Monitors {DMMV <GO>}

To contact the reporter on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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