German trade union Ver.di is trying to prevent the Schwarz group to obtain a 100 million euro loan from the European Bank for Reconstruction and Development-EBRD to development the Kaufland low price hypermarket chain in Romania.

The union claims the plan breaches labor laws repeatedly, according to the Namnews website.

The trade union addressed a letter to the EBRD asking it not to approve the loan because the Kaufland and Lidl store chains operated by Schwarz are in breach with labor laws and WTO standards both in Germany and abroad.

It also warns EBRD that the unrestricted development of the two chains in CEE Europe will increase pressure hugely on local providers, thus disturbing the competition environment.

Starting in 2004, the EBRD and the IFC offered Schwarz loans of hundreds of millions of euro to expand its activities in Central and Eastern Europe. In December last year, Kaufland Romania launched a 300 million euro project to open hypermarkets in small and medium towns. A third of the money is to be covered by an EBRD credit.