An estimated 50,000 jobs are being lost every month in Germany, and the government is forecasting that output will slump by more than five percent this year, second only to Japan among major economies.
The last time that Germany’s economy suffered such a slump was in the Great Depression of the 1930s, a period that brought the Nazis to power and led to World War II.
Seventy years later, the situation is no nearly as dramatic, with Germany spared the hyper-inflation that wiped out people’s savings overnight and the mass employment that turned desperate people to Hitler.
So far, a government scheme subsidising firms to cut working hours and the laying off of temporary workers has helped keep a lid on unemployment with the jobless rate only inching up in recent months.
But experts fear that the steady upwards creep of unemployment, which in March stood at 3.6 million, is in danger of turning into a flood as the recession here deepens.
Public disquiet is expected to grow – spicing up campaigning for general elections on September 27 -but what is uncertain is whether this will turn into massive street protests and even more militant action.
The head of Germany’s DGB federation of German trade unions, Michael Sommer, has warned that mass layoffs would be taken as a “declaration of war” by workers and unions.
“At that point, social unrest can no longer be ruled out,” Sommer said.
Gesine Schwan, the Social Democrat candidate for the largely ceremonial post of president, ruled out burning barricades but said the government “had to prevent the disappointment being felt by many turning into an explosive mood.”
“In the current crisis we should not dramatise things or fan fears, but neither should we mask the reality,” the centre-left Schwan said.
Oskar Lafontaine, the leader of Germany’s hard-line socialist Left party, which is aiming to tap into public anger in September’s election, went further.
“When French workers are angry they lock up their managers. I would like to see that happen here too, so that they notice there is anger out there, that people are scared about their livelihoods,” Lafontaine said.
But for the most part, such comments have been the exception, and experts believe that the risk of unrest is low.
Heiner Ganssmann from Berlin’s Free University, for instance, thinks the rise in unemployment is more likely to be accompanied by “resignation and apathy” than militant action. He says the situation is different to France.
“The experience with unemployment is different, at least in Germany. People become more apathetic than rebellious,” Ganssmann told AFP. “It is partly a cultural tradition. In France people are much quicker to take to the streets. Germans still trust the authorities.”
May Day will give a first taste of whether such predictions are right or if the government needs to do more to soothe public anger, with the financial crisis expected to result in an increase in numbers on the streets.
The international day of the worker has for the past two decades been accompanied in German cities by street violence and clashes between far-right skinheads, anti-fascist groups and police.
Dieter Ruch, a sociologist and expert on left-wing groups, expects more protesters this Friday because of the recession but that this will not necessarily lead to more violence.
“The crisis could simply push more people to demonstrate, but it will not mean more violence,” he told AFP.
Police in Berlin are taking no chances, and plan to deploy 5,000 officers to keep the protesters in line, who according to organisers will number 10,000 to 15,000.
Fears have been stoked further by an alarming spike in the number of arson attacks by presumed anarchists in Berlin in the run up to May 1.
According to Berlin police figures, over 70 cars – mainly upmarket models such as BMWs and Mercedes – have already been torched since the beginning of the year, compared to just over 100 for the whole of last year.
“Violence is a way of achieving our aims,” one militant giving his name just as Peter said menacingly. “We do not accept that the state has the monopoly on violence, and it is our aim for there to be social unrest.”