The third round of public sector wage negotiations in Germany has ended without an agreement.

Talks between unions and employers, representing 2.5 million workers, failed after four days of discussions in Potsdam.

Key union demands included an 8% pay rise or at least €350 more per month, plus three extra vacation days.

Employers countered with a 5.5% pay increase and other benefits, but the gap remained too wide.

The dispute will now move to arbitration, with independent mediators stepping in to find a resolution.

During this phase, no strikes are allowed, offering a temporary reprieve from recent disruptions in services like childcare and waste collection.