BERLIN – Germany’s unemployment rate rose moderately to 6.1% last month, contained by the widespread use of short work programs that put millions on the payroll, official data showed Wednesday when the government considered a stimulus package to revive Europe’s biggest economy.
The number of people registered as unemployed rose to 2.81 million in May – 169,000 more than in April and 577,000 more than a year earlier, the Federal Labor Agency said. The unadjusted unemployment rate – the main figure in Germany – rose from 5.8% to 6.1%, following a sharper increase in April.
Under seasonally adjusted conditions, unemployment increased to 6.3% from 5.8%. Before the coronavirus pandemic struck, it had reached 5% for months.
Germany’s improvement has been moderate by international standards because employers are making extensive use of government-supported short work programs that allow them to keep employees on their payroll while they wait for better time. Federal employment agencies pay at least 60% of reduced employee salaries or zero hours.
More than 10.1 million people have registered for the program at the end of April. The Ifo think tank estimated this week, based largely on a company questionnaire, that 7.3 million people were actually employed at short notice in May. Germany has a population of 83 million.
On Wednesday, Chancellor Angela Merkel’s coalition spent the second day completing a stimulus package intended to help start the economy. It is estimated that it is worth 80-100 billion euros ($ 89-112 billion).
Germany already offers a total of more than 1 trillion euros in aid through various packages, which include money for pairs of small companies and individual entrepreneurs through virus-related closures and to pump capital into larger companies where needed.
The crisis has thwarted the dedication of the government to keep the budget balanced, long a matter of pride. After six years in the dark, the country borrowed 156 billion euros to finance the existing rescue package and cover the expected shortfall in tax revenue.
Germany began loosening the coronavirus restrictions on April 20, about one month after it was introduced, and easing has increased since then. However, the economy experienced a recession in the first quarter and it is expected to deepen in the current quarter.
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