Cabinet moves to end strike crisis

Following the collapse of talks between unions and employers on Tuesday, the Danish government finally stepped in yesterday, introducing a settlement which will force an end tomorrow to a nationwide strike which has lasted 10 days. Under Danish legislation, the government can propose a settlement that Parliament can approve and pass into law. Fuel and food supplies expected to return to normal by the weekend.

Until now, the Prime Minister, Mr Poul Nyrup Rasmussen, has avoided direct intervention, fearing a backlash by the unions in the forthcoming Amsterdam Treaty referendum. However, he said yesterday he saw no other solution to the conflict, with nationwide fuel and food shortages and health services close to collapse.

The settlement was discussed by parliament yesterday and will be put to a vote today. It is virtually certain to be passed due to the support of the two largest opposition parties. Under the settlement, all employees will receive two days extra holidays, and workers with children under 14 years of age will get three additional "caring" days. In return, employers will receive tax relief of 325 kroners (£32.50) a year for each employee. They will also pay less in employee pension contributions.

The settlement falls short of workers' demands for an extra week of paid holidays. However, it is close to the employers' most recent offer of one extra holiday and one "caring day". The employers had stressed that they could not break the financial framework of this offer and the tax reduction is seen as a way to keep the costs within this frame.

The chairman of the Socialistisk Folkeparti (SF), Mr Holger Nielsen, said the tax reductions will mean the taxpayer will end up paying for the extra days.