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Wednesday, 6 February, 2002, 10:28 GMT
German jobless total tops four million
Employment office
Beating unemployment was a key election pledge
German unemployment has risen above the critical four million mark in January.

On a seasonally unadjusted basis, there were 4.29 million people out of work, taking the jobless rate up to 10.4% from 9.6% in December.

Analysts said the rise in joblessness may not start to reverse before the middle of the year, close to federal elections, scheduled for 22 September.

Chancellor Gerhard Schroeder's conservative opponents have attacked the government's record on unemployment.

The chancellor had promised to get unemployment down to 3.5 million during his term in office.

Crucial level

The four million mark is psychologically important, but not that high in historic terms.

Satirical images of Chancellor Gerhard Schroeder
The chancellor faces a tough poll this autumn
German unemployment reached its recent peak of 4.8 million in 1998 under Mr Schroeder's predecessor, Helmut Kohl.

And the government pointed out that, once adjusted for the seasonal factors that play a particularly strong role in January, unemployment was a shade below four million.

The government blames the global downturn, but its critics and many economists say Germany 's over-regulated and inflexible labour market has made matters worse.

Union trouble

Mr Schroeder, critics say, has been too reluctant to pursue labour reforms, which are opposed by his traditional allies in the trade unions.

The chancellor has tried to get unions and employers to agree voluntary reforms, but the talks have been deadlocked.

At present, an industrial conflict over wages has banished any hope of agreement before the September election.

German trade unions are demanding pay increases twice or even three times higher than the country's inflation rate.

Rising unemployment could also spell trouble for Germany's budget, since higher unemployment payments will further bloat the country's soaring public deficit, already perilously close to the limits laid down in the Maastricht Treaty.

 WATCH/LISTEN
 ON THIS STORY
Wolfgang Munchau, Financial Times Deutscheland
"It is the highest level for four years"
The BBC's Patrick Bartlett in Frankfurt
"The latest figures show 10.4% are out of work"
Stefan Bergheim, JP Morgan in Frankfurt
"It doesn't spell disaster but it spells weakness"
See also:

06 Feb 02 | Europe
Jobless put Schroeder on the line
16 Jan 02 | Business
Unemployment: UK leads the pack
11 Jan 02 | Business
German hopes for unemployment cure
28 Dec 01 | Business
No respite for German economy
30 Nov 01 | Business
France and Germany lose jobs
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