Labor market: The federal government must help out employment agencies with nine billion euros

Berlin. Because of the persistently high unemployment, the federal government will have to help the Federal Employment Agency (BA) this year with loans worth up to nine billion euros. The Federal Ministry of Finance wants to provide additional funds of a good five billion euros for this, according to a template for the Bundestag's budget committee available to the Reuters news agency on Thursday.

Together with the almost four billion euros already planned, the loan requirement increases to around nine billion euros. That is around 600 million euros more than expected in June.

The main reason for the financial problems is the sharp increase in spending on unemployment benefits. When planning its budget, the federal government had assumed that the labor market would recover, but this did not happen.

In June, the BA warned of a budget deficit of more than eight billion euros due to the weak economy. At the time, she had also predicted that her debts to the federal government could total around 23 billion euros by the end of 2030. The BA is financed primarily from unemployment insurance contributions, which currently amount to 2.6 percent of gross wages.