Germany looks likely to emerge from this year's brutal downturn without suffering a large-scale increase in unemployment thanks to the government's policy of subsidising wages, economists said yesterday.
The conclusion of a study by the IAB labour market institute comes amid fresh signs that Germany's fledgling recovery is gaining momentum. The ZEW institute said its closely watched survey of investors' expectations had jumped by 16.6 points to 56.1 points in August, the highest in three years.
The recent upbeat economic news, with recent data showing Germany, France and Japan are pulling out of recession, has sparked a global debate about how governments should manage the transition. The International Monetary Fund's chief economist said yesterday a “nascent” global recovery was under way but warned US policymakers walked a tightrope in timing the end of the fiscal stimulus.