The German unemployment rate soared above 10 per cent as the number of unemployed Germans broke above 4 million in January, the government reported today.
The unemployment rate climbed to 10.4 per cent from 9.6 per cent in December, and the number of jobless rose 326,000 in unadjusted terms to 4.29 million people.
The unemployment rate rose to 8.3 per cent in the west, up from 7.7 per cent in December, and climbed from 17.6 per cent to 19.1 per cent in the former communist east.
The German economy, Europe's biggest, stalled in the second quarter of last year, contracted slightly in the third and is widely forecast to have shrunk again in the fourth quarter. Two quarters of decline is the usual definition for recession.
The new figures from the Federal Labour Office came amid an already heated political atmosphere in Berlin as Germany gears up for national elections on September 22nd.
Already realising the problem, Chancellor Gerhard Schroeder abandoned a pledge to reduce the number of unemployed to 3.5 million by election day, instead promising a push to create more low-wage jobs and public investment and making sure to point out that 4.5 million people were out of work the winter before he took office.
In the past week, Mr Schroeder has also had to confront news that the European Commission is urging member states to warn Germany to get its budget back in line. Such an EU reprimand would be the first and an embarrassment for Germany.
Mr Edmund Stoiber, the Bavarian governor who is Schroeder's main challenger, has seized on the bad economic news to sharply criticise the economic record and policy of Mr Schroeder and his governing Social Democrats