By Maria Sheahan
FRANKFURT (Reuters) - German train drivers said on Thursday they were suspending a long-running and economically damaging series of strikes, agreeing to take a dispute over negotiating rights with rail operator Deutsche Bahn [DBN.UL] to arbitration.
The stoppage, the ninth in a series of strikes over the last 10 months that have delayed commuters and cost industry millions of euros daily, will be suspended at 7 p.m. (1700 GMT) on Thursday, drivers' union GDL said in a statement.
The suspension would last through the arbitration period from May 27 to June 17.
Industry has warned that the latest strike, which started on Tuesday and which GDL had threatened would be its longest ever, could cost Europe's biggest economy up to 100 million euros ($111 million) a day, hurting its image as an industrial and logistics hub.
The GDL said in a statement that German railways has finally accepted its chief demand that the union can negotiate wage deals for railway workers who are not train drivers.
"After a dispute that has lasted nearly a year, it was the pressure from the ninth strike that finally broke through the Gordian knot," said GDL leader Claus Weselsky.
The two sides each nominated an arbitrator. The GDL picked Thuringia's state premier Bodo Ramelow, a leader of the Left party, and German rail picked Matthias Platzeck, a former Brandenburg state premier from the Social Democrats (SPD).
"We are very relieved ... the order of the day is mediation, not strikes," Deutsche Bahn board member Ulrich Weber said in a statement on Thursday, after two days of talks with the small but powerful union.
SHARP CRITICISM
Deutsche Bahn said it would soon announce when the trains would be running on normal schedule again.
The GDL represents about 20,000 train drivers at Deutsche Bahn, which has about 200,000 employees. Only about a third of Germany's trains driven by civil servants have been in operation during the strikes that caused disruption for millions.
The scope of the action had alarmed politicians, businesses and other unions in a country known for relatively harmonious labour relations. It drew sharp criticism from both the BDA employers association and the DGB union umbrella organisation.
The GDL union wants a 5 percent pay rise for its members, a shorter working week and the right to represent other workers in the company, such as train stewards.
Deutsche Bahn has offered a 4.7 percent pay rise plus a one-off payment of 1,000 euros, but it has refused to let union negotiate for other workers.
The dispute over pay, working conditions and the power of the union itself has caused major disruption in a country where about 5.5 million people travel by train every day and one-fifth of freight - 620,000 tonnes a day - is hauled by rail.
Economists estimate that the last strike could have clipped 0.1 percentage points off German economic growth in the second quarter of the year, costing Europe's biggest economy up to 750 million euros in lost activity.
(Reporting by Maria Sheahan and Erik Kirschbaum; Editing by Michael Shields and John Stonestreet)
