Fall in unemployment raises hopes in Germany

FOR THE first time in three years, Germany's seasonally adjusted jobless rate fell back last month, raising hopes in government circles that the economic recovery is beginning to have an effect on the country's appalling level of unemployment.

According to figures released by the Federal Labour Office yesterday, adjusted unemployment fell to 4.324 million in May, the first time a decrease had been recorded since 1995.

The unemployment rate, which is based on unadjusted data, fell to 10.9 per cent, compared with 11.4 per cent in April. The number of people out of work fell by 58,300 in seasonally adjusted terms from 4.384 million in April.

The signs of improvement in the jobless figures were particularly welcome as the council of the new European Central Bank held its first meeting in Frankfurt yesterday.

Wim Duisenberg, its president, said no policy decisions were taken; but the ECB will have to co-ordinate members' interest rate decisions in the run-up to 1 January when the single currency starts. The level of rates in Germany will have to rise, although no move is expected at the Bundesbank's council meeting today.

Though Chancellor Helmut Kohl's government saw in the figures a vindication of its policies, the labour office sounded a note of caution. "The positive jobless development in May doesn't allow us to sit back," said Bernhard Jagoda, the labour office president. "It's only a nice intermediate goal which we achieved."

Economists also noted that the fall in the number of jobless - the biggest in unadjusted terms for May since 1990 - was partly due to make-work schemes that have received extra funding in the run-up to September's elections.

The government would not hear of such caveats, however. "The economic upturn is now feeding through as an increasing improvement in the labour market situation," said Gunter Rexrodt, the Economics Minister. "No serious observer will now deny that we have moved through rock bottom in the labour market as well."

"I think that by the end of 1998 we will have around 300,000 fewer unemployed than a year earlier," he added. "This will mean the average unemployment rate will be lower than in 1997."

The government's optimism stems from the gathering pace of economic recovery. Figures released last week showed that GDP in the first quarter of this year was 3.8 per cent more than in the corresponding period in 1997. Such growth rates have not been seen since German reunification in 1990.

Outlook, page 19

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss