German job market will take up to 3 years to recover

Country's unemployment rate, however is not expected to surpass 6.5%-7%

Germany's Federal Employment Agency Chief Detlef Scheele

It will be at least three years before Germany's labour market recovers from the fallout of the coronavirus pandemic, the head of the country's Federal Employment Agency told dpa.

"It will certainly take until 2022 or 2023 before we are back to normal levels," Detlef Scheele said.

"But we believe that this can happen again," he added.

Germany's unemployment rate stood at 6.2% in June, amounting to some 2.85 million people without a job, almost 640,000 of whom have the current crisis to blame for their situation.

Scheele is expecting unemployment to tick up over the course of the summer, as is usually the case, although he doesn't expect the number of unemployed to rise above 3 million.

He said that the current crisis is linked to the virus rather than economic or structural causes, meaning that a recovery can begin as soon as certain factors start moving in the right direction.

"We are currently expecting a downturn that is predominantly due to the effects of the pandemic. The labour market was in fact in good health," Scheele said.

He pushed back against fears that a current furlough programme, under which the state covers the wages of out-of-work employees for struggling companies, will merely delay lay-offs and even insolvencies.

"Short-time work is functioning," he said, using the official term for the scheme. "At the moment, we see no indications of a larger wave of redundancies."

More on this subject: Coronavirus

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