German jobless total soars

THE parlous state of the German economy was underlined by news that unemployment has increased to its highest level since the Great Depression of the 1930s and the rise of Hitler.

Economists think that Britain could surpass Germany as Europe's largest economy within a generation as UK employment is high and Britain is expanding at a faster rate. Britain's gross domestic product per head has already overtaken Germany's.

More Germans are out of work than at any time since 1933 after the economy had been battered by hyperinflation that began a decade earlier.

The Federal Labour Office in Germany confirmed that the jobless number rose by more than 500,000 to 5m last month - 12.1% of the working population. Ministers said the true jobless total could be closer to 7m once those on subsidised employment schemes were included.

The government admitted that the number was 'dramatically high' but said part of the rise was due to the recent inclusion of those claiming long-term benefits. The German Chancellor Gerhard Schroder is struggling to reform the labour market after having pledged to slash unemployment when he was elected in 1998.

German consumers are also suffering with the government reporting a 1.2% drop in retail sales in January. Germany is still struggling to resuscitate industry in the former East Germany where unemployment is rife and the economy is stagnant.

Meanwhile, it emerged that Russia this week repaid its debt to the International Monetary Fund in full - three years ahead of schedule. The repayment of the final $3.3bn marks the end of the country's dependence on the IMF, from which it had borrowed since the fall of communism.