German unemployment fell slightly last month, according to official figures released yesterday, a day after Chancellor Schröder appointed a new super-minister to reform the economy and the labour market.
Unadjusted unemployment - which excludes seasonal factors - fell under the psychologically important four million mark in September. The drop was a surprise to analysts, who were expecting a rise of at least 20,000. However seasonally adjusted figures show there are still 4.098 million out of work, an unemployment rate of 9.5 per cent.
Mr Florian Gerster, head of the German Labour Office, warned that the German economy lacked momentum to increase employment and that there were increasing signs of slowing economic growth.
This is the economic reality facing Germany's new labour and economics "super-minister", Mr Wolfgang Clement.
His hasty appointment, before the end of coalition talks with the Green Party, is a sign of the government's determination to get working on economic reform.
But Mr Clement, the 62-year- old governor of the industrial heartland of North Rhine-Westphalia, faces a mammoth task. The German economy is expected to grow by less than 1 per cent this year, while unemployment is still alarmingly high.
Mr Clement's first task will be to implement the "Hartz Report", some 330 pages of proposals to reform the employment market. The report recommends transforming the overly bureaucratic federal employment offices into temporary staffing agencies with greater powers to pressure people to take available positions. Other proposals would cut down on red tape for the self-employed and help small and medium-sized businesses to hire new staff.
"In the fight against unemployment there can be no taboos," said Mr Clement recently. He is known as "the buddy of the bosses" because of his close relations with industrial leaders in the Rhineland.
He has a record of pushing through policies closer to those of the liberal Free Democrats than the Social Democrats and is likely to take a pro-market approach to solving Germany's structural problems.
Employer organisations welcomed his appointment, while unions reacted warily.
Ms Angela Merkel, leader of the Christian Democrats (CDU) called the appointment "an admission of the government's failure on economic matters".
The CDU had planned to fuse the economic and labour portfolio had they won last month's election.
Mr Clement replaces two ministers whose weak performance in office drew fire from the opposition during the election campaign, employment minister Mr Walter Riester and economics minister Mr Werner Müller.
