The German government will extend its short-term work program by an additional 12 months.

Rainer Bruederle, economy minister, disclosed that Angela Merkel's Christian Democrat Union will lengthen the initiative, which has been hailed for keeping the country's unemployment rate low, from six months to 18 months

The program ensures that companies keep workers on shortened shifts when orders are low by subsidizing their social insurance payments by 50 per cent.

According to Mr Bruederle, the scheme has proved itself during the economic crisis by keeping joblessness lower in Germany than many of its trading partners.

He said: "We're not completely over the crisis. I and Ms Merkel support extending the help for 12 or 18 months to help companies and employees."

Unemployment in Germany fell unexpectedly in October, with the number of individuals out of work declining by 26,000 to 3.43 million, the federal labor agency revealed.