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Business

Business Briefs

German retail sales fall; unemployed might be required to take "mini-jobs"; Kohl to be questioned on Kirch consultant fees; Bundesbank sees risks to growth.

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Germans are buying less in hard times.

German retail sales slump

German retail sales fell sharply in March as rising unemployment and sluggish growth in Europe's largest economy kept consumers out of the shops. Retail sales tumbled three percent in March compared to February and were down four percent on the year in real, or inflation-adjusted, terms, preliminary figures from the Federal Statistics Office showed on Friday. "The retail sector is stuck in a downturn. We can't really say whether April will be better. We're hoping for a recovery in the second half of the year, but we are realistic and there are still no signs of a turnaround," Hubertus Pellengahr, spokesman for the HDE German Retail Association, told the Reuters news agency.

Government plans crackdown on unemployed

In an effort to crack down on welfare loafers, Germany's Economics Ministry said unemployed workers must be ready to take on so-called “mini-jobs”, according to a report in the Süddeutsche Zeitung newspaper on Friday. The mini-jobs allow workers to earn up to €400 ($448) without social and welfare benefits being taken out. The jobs have been unattractive to many because under Germany's social security system, they can often earn more from unemployment and welfare benefits than from a monthly wage. The ministry is planning on proposing that those who refuse mini-jobs face the same sanctions given people who reject full-time employment. German Economics Minister Wolfgang Clement has repeatedly mentioned short-term jobs as part of his plan to fight Germany's high unemployment, which currently hovers around 4.6 million, or 11 percent of the population.

Kohl to be asked to justify consultation fees

Former German Chancellor Helmut Kohl will be asked by the embattled KirchMedia company what sort of services he provided for his high consulting fee in the years after he left the chancellery. The bankruptcy lawyer for KirchMedia, the company of fading media lion Leo Kirch, wants to determine whether the fees were for actual services rendered or payments for favors done that can be demanded back by the group's creditors. In Kohl's case those payments amounted to €600,000 over three years. KirchMedia, which owns a controlling stake in broadcaster ProSiebenSat1 and Europe's largest library of film rights, has been in bankruptcy proceedings for almost one year now. KirchMedia was regarded as the jewel in the crown of the Bavarian entrepreneur's business empire. The Kirch Group collapsed after facing €6.5 billion debt in April 2002. American businessman Haim Saban is the front-runner to buy KirchMedia.

Bundesbank sees risks to euro zone growth Bundesbank Chief Economist Hermann Remsperger told Reuters on Friday that he expected the economy in the euro zone and Germany to improve during the year, but cautioned there were still risks to growth. Speaking at a Bundesbank conference on monetary policy, Remsperger defended the European Central Bank's two percent inflation ceiling and said deflation risks could be avoided by preventing inflation falling below one percent for an extended period. Some economists expect the ECB will have to lower interest rates in coming months to spur growth in the 12 nation euro area.