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EMPLOYMENT

Only slight increase in unemployment

Unemployment in Germany is at its lowest level in 15 years and was better than expected this January, despite stock market volatility and fears of a US recession. The number of unemployed increased in January by 253,000 to 3.66 million, according to a report by the Federal Agency of Employment (BA) on Thursday. January and February are usually slow months for the economy, however, the milder weather might have helped to soften the seasonal effect.

“The positive development of the employment market is continuing,” Frank-Jürgen Weise, CEO the Federal Agency of Employment told the Frankfurter Allgemeine Zeitung. “No skid marks are visible on the employment market as of yet,” he added.

He continued that the BA has a positive outlook on employment for 2008, despite turbulence in the financial markets and the slower pace of growth. The BA expects unemployment to rise slightly in February.

“Despite the bank crisis and the Nokia closing, we can be confident again” said Olaf Scholz, the Federal Minister for Employment and a centre-left SPD politician in a speech in Berlin. He spoke of a “robust upswing in the employment market.”

ECONOMY

Worst of crisis now behind us, says Germany’s chief banker

Germany has turned the corner on the worst of an economic crisis sparked by the coronavirus pandemic and is now on the path to recovery, the central bank chief of Europe's biggest economy said Sunday.

Worst of crisis now behind us, says Germany's chief banker
Jens Weidmann. Photo: DPA

“We experienced in the last months the deepest economic slump in Germany's (post-war) history,” Jens Weidmann told Sunday's edition of the daily Frankfurter Allgemeine Zeitung.

“The good news is: the trough should be behind us by now, and things are looking up again. But the deep slump is being followed only by a comparatively gradual recovery.”

Weidmann, who has never minced his words against expansionary policies ramped through in the past by the European Central Bank, on Sunday also voiced support for the unprecedented economic rescue and stimulus packages unleashed by Berlin to shield German companies and jobs.

Chancellor Angela Merkel's government had stunned observers in March when it unveiled a rescue package worth 1.1 trillion euros, smashing through a long-held no new debt dogma to fund the measures.

Earlier this month, it said it would plough another 130 billion euros into various schemes, including a cut in VAT, to stimulate the economy.

 

Reacting to comments that Germany, once known as a “frugal” nation, was now dramatically loosening its purse strings, Weidmann said: “The image of the Swabish housewife is often wrongly portrayed.

“She is not saving for the sake of saving, but so that there is money that can be spent sensibly and in case there are difficult times. And that is precisely the case here.”

Like nations across Europe, Germany shut schools, shops and sent workers home from mid-March to halt transmission of the coronavirus.

The impact of the health crisis has pushed the economy into a deep recession believed to be the worst since World War II.

After the rate of new infections dropped sharply, Europe's biggest economy began easing restrictions in early May although social distancing rules are still in place and huge events banned.

Nevertheless, the improved health situation and the huge government support have helped lift sentiment, with a closely-watched survey showing confidence among investors surging to its highest level since before the financial crisis.

 
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