A winter of labor strife is looming. Following the collapse of steel contract talks on Jan. 22, the powerful IG Metall, Germany's biggest union, is asking 135,000 steel workers in the country's Ruhr industrial heartland to vote to strike. If they do, as expected, it will be Germany's worst labor conflict since IG Metall's three-month job disruption in 1984.

The steel battle is a bellwether for millions of other German workers and their employers. It is also being closely watched by the Bundesbank, which has driven German interest rates up to the highest level in its history to stamp on what it fears is a looming wage-price spiral. The government is calling for settlements "substantially below" 1991's 6.5% average.

But already, 430,000 bank workers have started a series of short warning strikes, while 1.2 million government workers will soon begin talks. Employers complain that the double-digit pay hikes that the unions are calling for will cripple their ability to compete in global markets.

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