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 newspapers, Grimm emphasized the need for deregulation and increased reliance on market forces as key drivers for economic recovery and subsequent employment growth. She argued that a strengthening economy is the most effective means of reducing unemployment.
Grimm also advocated for reforms to labor laws, specifically highlighting the potential benefits of increased flexibility. She pointed to models in countries like Denmark, where a robust social safety net coexists with less stringent job protection regulations. While acknowledging the importance of worker security, Grimm suggested that Germany’s current level of employment protection could be hindering economic dynamism.
In this context, she expressed reservations regarding the recently agreed-upon increase to the minimum wage, asserting that it could ultimately contribute to higher unemployment levels.
Grimm indicated that the rise in unemployment figures was anticipated and underscored the critical question of whether the government can successfully navigate the ongoing economic transition. She expressed concern over current fiscal policy, noting a renewed focus on government debt, including proposals for joint European borrowing ahead of the Franco-German Ministerial Council meeting.
The Federal Employment Agency recently released data confirming that unemployment in Germany has reached a level not seen in over a decade, exceeding three million individuals.
