Germany's top union calls for stepped-up support of steel sector

BERLIN (Reuters) - IG Metall, Germany's largest and most powerful labour union, on Wednesday called on the German government to come up with concrete steps to support the country's struggling steel sector.

The remarks by Juergen Kerner, chief treasurer and executive board member of IG Metall in Frankfurt, came as Germany approved its national steel strategy, which stopped short of pledging substantial subsidies.

"The steel action plan must produce concrete support schemes and be implemented fast," said Kerner, who also serves as deputy supervisory board chairman at Thyssenkrupp, the country's largest steelmaker.

"The current crisis and the resulting underutilisation of the sector can lead to massive liquidity problems and requires the backing of the federal government and the states," he added.

"Only then will we be able to produce 'green steel' in Germany," Kerner said, referring to the process of making steel, one of the most polluting industrial processes, with the help of hydrogen, a process that would significantly reduce emissions.

The steel sector, battered by overcapacity, weak demand from the automotive industry as well as cheap Chinese imports, must stump up 30 billion euros ($34 billion) by 2050 to become climate-neutral.

That has fuelled talk of national consolidation to create a German steel champion by combining the activities of Thyssenkrupp and Salzgitter, the country's No.2, a deal that requires strong political support.

Kerner in May said he was in favour of creating a national champion, adding the government could be a shareholder in a combined entity and that the fund set up by Germany to support firms hit by the coronavirus crisis could be a way to fund it.

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(Reporting by Christian Kraemer; Writing by Christoph Steitz; Editing by Maria Sheahan)