Food Labelling Directive Proposal from Commission Yet to Materialize Among EU Member States
In the past year, a significant shift has been observed in Germany's labor market. As of now, 414,000 young individuals have applied for apprenticeship positions at employment agencies, marking a 12,000 increase from the previous year [1]. However, this surge in applications has not been matched by an equivalent increase in available positions, leaving 182,000 apprenticeship positions unfilled [1].
Rainer Dulger, the president of the German Employers' Association, has called for a realignment of labor market policy, citing the high number of unemployed individuals as a clear message for a need to restart labor market policy [1]. He is not alone in his concerns, as Peter Altmaier, the employers' president, has urged young people to seize the opportunity and not forgo an apprenticeship, highlighting the better long-term earnings prospects and more stable employment prospects that come with vocational training [1].
The total number of open positions in Germany, as reported by the Federal Employment Agency, has decreased to 628,000, which is 75,000 fewer than a year ago [1]. This decrease in available positions has contributed to an increase in unemployment, with a total of 991,000 people receiving unemployment benefits in July [1]. Furthermore, 3.877 million people of working age in Germany are eligible to receive unemployment benefits, including those with jobs but insufficient income to meet living expenses [1].
Despite these challenging circumstances, predictions for the recovery of the German labor market beyond the level of 3 million unemployed individuals are cautiously optimistic. Economic forecasts, including those from major German institutes, suggest the labor market crisis caused by recent weak growth is expected to ease as Germany’s economy grows steadily from 2026 onward [2].
As of mid-2025, unemployment in Germany was slightly below 3 million (2.914 million in June 2025), with the unemployment rate stable at about 6.2% [1]. German economic institutes, such as the ifo Institute and Kiel Institute for the World Economy, forecast GDP growth improvements in 2026 (+1.5% to +1.6%) after modest or near-zero growth in 2025. This improved economic activity is expected to support labor market recovery beyond the 3 million unemployed mark [1].
The Bundesbank projects slow economic growth for 2025, around stagnation or just slight annual increase, but anticipates better growth rates of 0.7% in 2026 and 1.2% by 2027, which should contribute to labor market improvement [2]. Factors aiding recovery include government infrastructure and defense spending, easing trade tensions, and monetary policy shifts, which collectively foster a positive business climate that has been improving since mid-2024 [1][3].
However, employment growth is expected to slow across the euro area including Germany due to demographic factors and weaker labor demand short term, implying the unemployment rate may stabilize before further improving [4].
In July, the number of reported apprenticeship positions decreased to 466,000, 26,000 fewer than the previous year [1]. Dulger also emphasized that mediation must be a top priority on the labor market policy agenda. He criticized the current policy of the traffic light government and called for a new approach [1]. Despite this, 140,000 of the young applicants were still unplaced in July [1].
In conclusion, while Germany’s unemployment remains near 3 million in 2025, credible forecasts predict a turning point in 2026 with accelerating economic growth fostering a gradual reduction of unemployment beyond this mark. However, this recovery is expected to be moderate, with structural and external risks potentially moderating labor market improvement pace [1][2][4].
References:
[1] Bundesagentur für Arbeit (2025). Monthly Report on the German Labor Market. Retrieved from https://www.arbeitsagentur.de/presse/monatsberichte/monatsbericht-zum-deutschen-arbeitsmarkt
[2] Bundesbank (2025). Monthly Report on the German Economy. Retrieved from https://www.bundesbank.de/Redaktion/DE/Pressemitteilungen/Monatsberichte/monatsbericht.html
[3] ifo Institute (2025). ifo Business Climate Index. Retrieved from https://www.ifo.de/en/ifo-business-climate-index
[4] European Central Bank (2025). Monthly Economic Bulletin. Retrieved from https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp2199.en.pdf
Finance ministers should focus on implementing strategies that encourage business growth, as an improvement in economic activity would support the labor market recovery beyond the 3 million unemployed mark, according to economic forecasts [1][2]. It is crucial for the government to invest in infrastructure and defense spending, as well as to ease trade tensions, to foster a positive business climate, especially considering the demographic factors and weaker labor demand short-term [1][3][4]. Funds should also be allocated toward increasing the number of available apprenticeship positions, which would address the gap between the high number of applications and the relatively low number of openings [1]. Additionally, implementing measures to improve mediation on the labor market policy agenda could help reduce the number of young applicants that remain unplaced, such as the 140,000 in July [1].
