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German Gov’t Hails Economic Report

August 6, 1998

FRANKFURT, Germany (AP) _ With September elections likely to turn on the state of the economy, Chancellor Helmut Kohl’s government on Thursday welcomed a report projecting an economic upswing and new jobless figures indicating a favorable shift in the employment market.

The Organization for Economic Cooperation and Development forecast growth of 2.75 percent in 1998 and 3 percent in 1999, in line with the German government’s forecasts.

``The report shows that Germany’s economic and fiscal policy is on the right track,″ Finance Minister Theo Waigel said in a statement.

Separately, the Federal Labor Office reported that the number of Germans without work rose slightly in July but the increase was less than in previous years, signaling an improvement in the jobs market.

The unemployment rate rose to 10.7 percent, or 4.13 million, in July, from 10.5 percent a month earlier.

The increase was due entirely to seasonal factors, Labor Office vice president Klaus Leven said, meaning that the jobs picture overall in Germany was showing signs of improvement.

Kohl’s Christian Democrats were quick to interpret the figures as further evidence that the government’s jobs creation policies were taking hold.

``The difficult path to structural adaptations, holding back salaries, spending discipline and modern work policies have paid off,″ said CDU party secretary Peter Hitze.

The opposition Social Democrats, however, disputed the government’s contention that the figures signaled recovery in the employment market. ``No one can say all’s clear,″ said the party’s employment expert, Ottmar Schreiner.

Schreiner said a more comprehensive jobs creation package, including tax reform to improve workers’ buying power, was needed for a full recovery.

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