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Business Briefs

March 21, 2003

Iraq War has consequences for the German labor market, TUI tightens its belt again, a new scheme makes it safer for Germans to flash their plastic and bankruptcies are on the rise.

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The war will have severe consequences for German employmentImage: AP
Iraq War: consequences for German labor market

The Iraq war could mean more than 1 million job losses in Germany, according to a German think tank study published today. The IAB -- the Institute for Labor Market and Career Research -- said the longer and more intensive the war is, the worse the effect on German employment will be. The lowest number of job losses, will be around 100,000, the IAB said Friday. "The already flagging German economy will be further strained by military hostilities," the IAB study said. German unemployment currently stands at 4.7 million, the highest figure since Gerhard Schröder became Chancellor in 1998

TUI tightens belt as war starts

Tourism giant TUI announced a further savings package in response to lost business as the conflict in the Gulf unfolds. TUI Chairman of the Board, Michael Frenzel, presented the savings plan to the supervisory board on Friday. The plan -- which is in addition to a savings package launched in 2002 and is set to save the travel concern around €111 million ($117 million) -- promises further savings of hundreds of millions of euro. Shares in TUI -- the world's largest tourism group -- have lost more half their value over the last three months and the firm is not shutting out the possibility of further job cuts. The firm already slashed 1,000 jobs a few months ago.

New plan removes fear for German credit card users

A new scheme is poised to help Germans feel more confident to flash their plastic. The new system -- which has been developed by credit card giant "Mastercard", called "Eurocard" in Germany -- sends the credit card owner a text message to their cell phone when unusual activity in their credit card account is registered. The idea is that the credit card holder can then freeze their account before any more fraudulent activity can take place.

German insolvencies rise sharply

The number of German firms going into insolvency rose by 16.4 percent to 37,579 last year, the Federal Statistics Office said on Friday. In total in 2002, 84,428 companies in Germany were insolvent, compared to 49,326 the year before. Officials said the worrying increase in firms going bankrupt is due to a recent reform of German insolvency law which affects private persons.