Germany’s unemployment figures have surpassed three million, prompting calls for economic policy adjustments from leading economist Veronika Grimm.
In statements to the Funke Media Group’s Saturday editions, Grimm emphasized the need to stimulate economic growth through deregulation and the strengthening of market forces. She posited that a natural decline in unemployment would follow improved economic performance.
Grimm also advocated for reforms to labor laws, suggesting increased flexibility in employment markets. She pointed to models like those found in Denmark and other European nations, where robust unemployment protections coexist with comparatively less stringent regulations surrounding dismissals. She indicated that while social safety nets are strong in these countries, the barriers to employer flexibility are lower. In this context, Grimm expressed concern regarding the recently agreed-upon increase to the minimum wage, suggesting it could ultimately contribute to higher unemployment levels.
The economist, a member of the German Council of Economic Experts, acknowledged that the rise in unemployment above three million was a previously anticipated development. However, she identified the crucial question facing the government as whether its planned economic transformation – often referred to as the “Wende” – would be successfully implemented. “Currently, that does not appear to be the case” she stated, pointing to renewed discussions about increased government debt, particularly in the context of upcoming German-French ministerial talks, centered on potential joint European debt.
The Federal Employment Agency in Nuremberg released the latest unemployment figures on Friday, revealing that the number of people without work has risen above three million for the first time in over a decade.