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Friday, March 07, 2003

Duisenberg Fiddles, While...German Unemployment Soars

Up to now I've been constrained by decency and caution. I really think that the euro cannot work, but I have been willing to let those who think they know better give it a try. But looking at the panorama that is unfolding in Germany, I think it is time to put the Spain, Greece, Portugal inflation preoccupations on the back burner (they have, after all, had plenty of warning about where they are headed) and try to put the German fire out as a matter of top priority. If not the whole eurozone risks sinking with them.

Unemployment in Germany has risen to 4.7 million. At 11.3 percent of the available workforce, it's the highest level since Chancellor Gerhard Schroeder's Social Democrats were first elected in 1998. Between January and February a further 83,000 people became jobless. And, compared to the level one year ago, there are 410,000 more out of work. Economy Minister Wolfgang Clement, who wants modernised labour laws, urged Schroeder to break with the past in a Bundestag speech he will deliver next Friday. It was time to act, not talk, Clement added. An opposition conservative deputy leader Friedrich Merz spoke of a disaster and government wrangles leading to inertia. The deputy chairwoman of the German trade union federation, Ursula Engelen-Kefer warned against rumoured cuts in allowances for long- term unemployed. Employers' association president Dieter Hundt said a shake-up was needed on tax, welfare and consultative bargaining.
Source: Deutsche Welle

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