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Germany's vaunted record of keeping its trains running on time has been undone by worsening labour strife in yet another sign that the country's once high-flying economy is crashing to earth.

Train engineers are in the midst of a four-day strike that has disrupted freight shipments, stranded hundreds of thousands of commuters and wrecked havoc on long-distance travel heading into this weekend's celebrations of the 25th anniversary of the fall of the Berlin Wall.

It marks the drivers' sixth walkout since early September, a record that would be unremarkable in, say, France but is a rarity in Germany, where such disputes are typically resolved through arbitration.

The rail action is similar to the round of strikes by pilots at air carrier Deutsche Lufthansa AG, numbering eight so far this year, but now on hold during negotiations. In both cases, small unions representing crucial workers are using their bargaining clout in an effort to improve pay and conditions during an economic slowdown.

Gewerkschaft Deutscher Lokomotivefuehrer, the union involved in the rail dispute, represents fewer than 20,000 of 196,000 employees at Deutsche Bahn AG, the state-controlled operator of one of the world's busiest rail services. DB carries more than five million passengers a day and accounts for almost a third of all German freight shipments. The walkout has slashed service to about 30 per cent of normal traffic.

The rail company has sought an injunction to end the walkout, but employers often lose such battles in German courts, something the government hopes to change with proposed legislation.

One German economic think tank puts the potential cost of the rail action at €100-million ($141-million) to an economy whose prospects were already looking dimmer by the month.

The European Commission has slashed its forecast for German growth next year nearly in half to 1.1 per cent from 2 per cent. The German government is forecasting only slightly higher expansion of 1.3 per cent next year and has lowered its 2014 estimate to 1.2 per cent from 1.8 per cent.

But the commission's calls for Berlin to open its spending taps for the good of the free-falling euro zone and its own stumbling economy are likely to fall on deaf ears.

After previously rebuffing calls to ease up on the austerity brakes, Chancellor Angela Merkel's government is responding with a modest increase of €10-billion in public investment between 2016 and 2018. But it remains committed to maintaining its current surplus and balancing the budget next year, even as tax revenues fall and the economic news worsens.

Ms. Merkel told the German employers association Tuesday that she would not borrow to boost investment in the economy, and repeated her insistence that what is needed in Europe is structural reform, not further deficit spending or aggressive monetary easing. Meanwhile, she is counting on public anger over the rail and airline strikes to push through a bill next month designed to block small numbers of workers from crippling critical services. The proposed law would require that wage negotiations be conducted solely by the largest union in each group and would give the courts more authority to wade into disputes.

Industrial production and trade numbers being released Friday are expected to highlight further weakness in the economy.

The German locomotive is slowing dramatically. This is no time for the drivers to be missing in action.

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