German govt files law to cut jobless by 50%

The German government said it has filed a draft law in parliament that aims to cut the number of unemployed by half in the next three years, according to economy and labour minister Wolfgang Clement.

In the first of a series of major labour law reforms, today's draft legislation aims to shorten the time it takes to find a job from 33 weeks to one week and support the self-employed, said Clement in a speech in parliament.

Clement said that shortening the average waiting time would see about 115,000 people becoming employed annually, thereby reducing the government's unemployment benefit budget by €1bn a year.

The self-employed will also get tax benefits for annual income of up to €25,000, he said.

Through these tax advantages, the government hopes to integrate people who work in the "grey economy", such as baby sitters, cleaners and those who care for the elderly, into the social insurance system.

Clement said a second labour law reform would be introduced next year to reorganise the federal labour office, which administers unemployment benefits and serves as a job placement agency.

The third stage aims to merge unemployment benefit and social welfare payments by January 2004, Clement added.