Germany can achieve full employment and strong growth, leading economists said as Chancellor Gerhard Schroeder and opposition politicians prepare to meet to discuss ways of boosting the country's flagging economy.
With unadjusted unemployment reaching a fresh post-war high of over 5.2 million in February and many top think tanks trimming their growth forecasts for 2005, Mr Schroeder is anxious to spur growth ahead of next year's general election.
He has mulled introducing short-term measures aimed at boosting the economy -- despite opposition from his finance minister - and tomorrow meets with opposition conservatives for a "job summit" to address soaring unemployment.
Mr Hans-Werner Sinn, President of the Munich-based Ifo economic research institute, who has been resolutely downbeat on the outlook for Europe's largest economy in recent weeks, told German weekly magazine Stern new jobs could be created.
"A return to full employment is possible," he said. Mr Sinn, a staunch advocate of reducing the cost of labour to enhance competitiveness, said modest earners in Germany should be able to supplement their incomes in more ways.
"Germany needs a system of personal wage supplements, in which low earners have two incomes: one from their work and a supplement from the state," he said. Last month Sinn said in an interview that in the long-term, Germany could expect real trend growth of a mere one percent.
Also speaking in Stern, Mr Gustav Adolf Horn, head of the IMK, a new trade union-backed economic think tank, said much higher growth rates were feasible in Germany.
"Three percent growth with no inflation is possible," he said, and urged Schroeder to boost growth by freeing up resources for Germany's local authorities.
"Every town mayor has any number of projects sitting in his desk drawer," he said, adding that if these were realised, smaller firms in Germany would give the domestic economy the push it so desperately needed.