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Last Updated:  Thursday, 6 March, 2003, 11:10 GMT
Yet more Germans out of work
Chancellor Gerhard Schroeder
Mr Schroeder had promised to cut unemployment
German unemployment has risen to 11.3%, its highest level during the government of Chancellor Gerhard Schroeder.

The figure is another embarrassment to Mr Schroeder, who has promised to bring unemployment down.

Economy Minister Wolfgang Clement described the latest data as "extremely serious" but rejected speculation that promised tax cuts would be brought forward in order to encourage economic growth.

Despite the worsening situation, the head of the German Federal Labour Office, Florian Gerster, promised a significant fall towards the end of the year.

But Mr Gerster added the improvement was dependent upon a wider economic recovery in the second half of the year.


"The increase remains an expression of the overall weak economy," the labour office said in a statement.

"As long as the German economy continues to stagnate, the jobs market cannot improve."

The state of the economy is weighing heavily on Mr Schroeder, whose popularity has been battered by a string of gloomy economic data since he was re-elected in September.

And it will increase the pressure to set about widespread social and economic reform.

Before the election, Mr Schroeder promised to reduce unemployment and kickstart growth with a sweeping programme of deregulation.

Rate cut hopes

A total of just over 4.7 million people were out of work in February, an increase of 90,000 over the previous month.

The job losses are being felt most acutely in the construction sector, but are also affecting firms such as shipbuilder HDW and banking giant HVB.

Schroeder's economic headache
06 Mar 03 |  Business
Shock surge in German jobless
05 Feb 03 |  Business

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