Although the unemployment curve rose less steeply than expected in December, Germany’s legion of workless now hovers dangerously close to the politically tender four million mark.
The Eurozone’s largest economy added a further 6,000 to its jobless total – albeit well below November’s figure and the 20,000 predicted by analysts. Nevertheless, the total now stands at 3,943,000 (9.6% of the nation’s workforce) and the entrail-rakers expect it to top the four million mark in the next few months.
The seers do not expect a recovery before the second half of this year. Emerging from a transcendental state, a Morgan Stanley soothperson opined: “We expect the German labour market to continue to deteriorate in the present quarter and see the unemployment rate rising several more tenths in the first half of this year.”
A recovery in H2 will come too late to sweep the economy from the political arena before September’s general election when it is set to become the main campaign battleground. The incumbent Gerhard Schröder administration will be particularly susceptible to criticism on the issue of unemployment, having pledged a 3.5m target in the 1998 election campaign.
The government has forecast 1.25% economic growth in 2002, but now concedes it could be as low as 0.75%.
News source: Financial Times