UPDATE 2-Bundesbank staff stage protest over branch cuts

By Marc Jones

FRANKFURT, Oct 13 (Reuters) - About 1,4000 Bundesbank workers staged the biggest protest in the bank's history on Tuesday when they demonstrated outside the German central bank's headquarters at plans to shut almost half its branches.

Other troubles at the German central bank also came to a head, as the bank's authorities stripped board member Thilo Sarrazin of one of his key duties following derogatory comments he made about Turks and Arabs in a recent interview.

As Sarrazin was learning his fate at a board meeting inside, employees from all over Germany were gathering outside, angry at plans to slash the number of regional Bundesbank offices.

Last month the bank revealed it was looking at closing 14 of its 47 branches by 2012, with another nine facing the axe by 2015 if it goes ahead with plans to set up two new cash-handling centres.

A final decision will be made by December but the plans would see branches in cities including Dresden, Bremen and Aachen shut, with 300 jobs expected to go and another 500 workers having to relocate.

Disgruntled staff created a raucous atmosphere for more than an hour, blowing whistles, banging drums and sounding air raid sirens outside the front gate of the 13-storey prefab concrete headquarters on the outskirts of Frankfurt.

'This is a historic first, as for the very first time Bundesbank employees turn into the streets to voice their protest,' said Bernd Kurczyk, a union head at the Bundesbank.

The demonstration follows a walkout in June by European Central Bank staff angry over pay and pension changes.

The Bundesbank, arguably once the most powerful central bank in Europe, has been whittled down since the euro replaced the deutschemark. Branch numbers have shrunk from around 170 in 2000, while the key tasks of setting interest rates and other monetary policy measures have moved down the road to the ECB.



SARRAZIN

Protesting employees were yet to learn of Sarrazin's fate but vented their anger at him during the demonstration. Up until the board meeting he had been in charge of cash circulation, the central battleground in the closure plans.

The bank's decision to strip him of one of his three main roles came after he was quoted as telling culture magazine Lettre International that Muslims in Berlin sponge off the state and that there should be a crackdown on immigration.

He added that a large number of Arabs and Turks in the city had 'no productive function, apart from selling fruit and vegetables'.

Charges have been filed against him in Berlin, including the accusation that he was inciting racial hatred. Sarrazin, 64, who later apologised for the comments, retained two of his three roles at the bank, in charge of risk control and IT issues.

(Reporting by Marc Jones; Editing by Stephen Nisbet) Keywords: BUNDESBANK/PROTEST Keywords: BUNDESBANK/PROTEST ([e-mail]; [phone]; reuters messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.