Bundesbank: Germany Keeps Losing Jobs

Germany's central bank, the Bundesbank, warned Monday that the German economy would continue to lose jobs over the next several months and called for greater labor market flexibility. The Bundesbank in its monthly report said 64,000 jobs were lost in the first half of the year. As the number of unemployed workers increased in July and August, "a new dip in the level of (job) activity is likely in the coming months. The persistence of a high level of under-employment clearly reflects the lack of efficacity in the labor market," the bank said. The authors of the report welcomed deregulation measures already adopted by the government and industry but stressed that "there is still work to do to reduce long-term unemployment." The report in particular called for an easing in restrictions on the ability of companies to reduce their workforces and in wage accords that apply to all enterprises in a certain sector regardless of their financial circumstances. The Bundesbank in addition voiced opposition to a minimum salary level, which had been advocated by some Social Democrat (SPD) leaders to assuage public anger over planned cuts next year in unemployment compensation. (AFP)