Train Strike in Germany Could Cost €100 Mln

Germany is facing an economic setback as estimates from the German Economic Institute (IW) suggest that a nationwide rail strike could cost up to €100 million ($109 million) per day in lost economic output.

The disruption, affecting production and business activities across various sectors, could significantly impact the national economy, according to Michael Groemling, an economic expert at IW.

The strike's influence on the economy varies, notably affecting the railway sector, which accounts for 40% of Germany's freight movement, leading to commercial losses in the logistics sector and its partners.

Moreover, the strike is expected to damage supply and production processes in the industrial sector, alongside consumer and service losses.

Sebastian Dullien from the Macroeconomic Policy Institute (IMK) at the Hans Boeckler Foundation, associated with labor unions, highlighted the complexity of calculating strike costs due to intricate economic interactions.

While some companies may incur direct losses from the strike, others, like car rental services and gas stations, could benefit from the disruptions.

Dullien noted that previous limited strikes in Germany and other countries have not shown significant long-term economic impacts.

Typically, lost production or sales can be compensated by the same or other companies, possibly through overtime work.

He also pointed out that labor strikes could have medium-term positive effects by bolstering consumer demand through improved collective labor agreements, ultimately benefiting the economy.