Policies intended to reduce German public spending and boost economic growth may help to create new jobs in the country.

An article in the Financial Times suggests the government is preparing a "drastic budget austerity programme", which will start next year and is intended to comply with the constitution.

The news source quotes government officials as stating cuts of at least €10 billion a year will be introduced through to 2016 and tax increases may be put in place.

Under the scheme, new measures will be implemented that are intended to boost employment with finance minister Wolfgang Schauble stating in an interview that reforms of social benefits may help to increase the number of people in work and produce savings.

German jobless figures for April published by AFP showed the country's unemployment rate fell from 8.5 per cent in March to 8.1 per cent during the month, with 162,000 fewer people out of work.

Posted by Alex Donnell