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Germany's public sector strikes moved into their seventh week Monday after arbitrators failed to find a compromise in the state of Baden-Wuerttemberg and employers dug in their heels over demands for a 40-hour week.

"Voluntary arbitration has come to an end, it's up to both sides now," said Roland Sing, one of two arbitrators trying to broker a compromise for 200,000 municipal workers in Baden-Wuerttemberg after five days of unsuccessful negotiations.

Services union Verdi said it would continue its strikes but said it would also look at more flexible forms of action. "We need a change of strategy," Alfred Wohlfart, the union's chief negotiator in Baden-Wurttemberg said.

Thousands of municipal workers including garbage collectors, hospital staff and kindergarten teachers have staged strikes over the past six weeks to protest at plans to raise the working week from 38.5 hours to at least 40 hours and cut bonuses.

There has also been deadlock between cash-strapped state public sector employers and Verdi amid increasing signs that the umbrella organization that co-ordinates collective bargaining for the states could fall apart.

The dispute has come to be seen as a test of strength for Verdi, which like other unions has been struggling to reverse a long-term decline in membership, and has opened up divisions between Social Democrat and conservative-run states.

In a separate dispute, thousands of doctors at public hospitals have also stepped up strike action for improved working conditions and a 30 percent rise in basic pay.

Municipal workers in the city of Hamburg and the state of Lower Saxony have reached deals on a sliding scale of working hours that will see better paid workers working longer hours but a proposal along these lines was rejected by both services union Verdi and employers in Baden-Wuerttemberg.

The conservative State Premier of Lower Saxony, Christian Wulff told Focus magazine the dire state of Germany's public finances did not allow any major concessions by the employer side and said any deal would have to be close to 40 hours.

If necessary, he said Lower Saxony would leave the Tarifgemeinschaft deutscher Laender (TdL), the employers' umbrella group, unless an acceptable could be reached.

"I won't hold my hand up for a catastrophic result to negotiations," he said.

If the TdL did fall apart, it would represent a major change to Germany's collective wage bargaining system in the public sector and risk exacerbating tensions in Chancellor Angela Merkel's coalition of conservatives and Social Democrats.

(China Daily March 21, 2006)