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Lufthansa forced to cut costs; Germany likely to break EU budget deficit limit; German unemployment seen lower in April.

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Lufthansa pilots may be asked to take wage cuts.

Lufthansa aims to reduce costs

German airline Lufthansa will likely have to undergo a further round of drastic cost-cutting, as the SARS disease epidemic in Asia and a weak global economy hurt business. A spokeswoman for the company said all aspects of the airline would be under consideration for finding potential savings. Lufthansa decided this week to slash the salaries of ground personnel and remove 15 aircraft from European routes. “But even all of these measures won’t be enough,” Lufthansa boss Jürgen Weber told the German news agency DPA.

Germany seen breaking EU deficit rules

Germany's budget deficit is unlikely to fall below the European Union's ceiling of three percent of gross domestic product this year, a junior finance minister said on Wednesday evening. According to the Reuters news agency, state secretary Volker Halsch said in a speech it was "rather unlikely" that Germany's deficit would fall back below three percent, having already exceeded the limit imposed by European Union budgetary rules last year. The German government cut its official growth forecast for 2003 to 0.75 percent from 1 percent on Monday amid rising unemployment and fading hopes for a recovery in the second half of this year. The government had said one percent growth was a condition for Germany to bring its 2003 deficit back below the EU limit, but officials have declined to comment ahead of new tax estimates to be drawn up in mid-May.

April unemployment seen falling

Germany's mass-circulation Bild newspaper said on Thursday it estimated unemployment in Europe’s largest economy fell only slightly to 4.498 million in April. The figure would be the highest level recorded for an April since 1990. Joblessness usually decreases sharply in the spring months, when construction and agricultural workers find jobs. Bild, which often gets official German unemployment numbers before they are published, said the figure for April was based on forecasts by "labour market experts." The official report is due to be published by the Federal Labor Office in Nuremberg next week.