Claude Trichet has also raised the alarm about the current swings on the currency market and the euro's sharp upward shift against the dollar, describing them as "brutal" and "unwelcome". The result is that the dollar's corresponding weakness against the euro is expected to be a major theme at the weekend meeting in Berlin of the Group of 20 rich and emerging economies. Amid signs of a slowing international economy, the council predicts that the rate of growth of exports will also ease up next year. After growing at 10.3 per cent in 2004, export growth is forecast to come in at 5.9 per cent next year. Imports are also tipped to roll back from 6.8 per cent this year to 5.1 per cent in 2005. The council also points to the lower number of working days in Germany next year as contributing to the slower economic growth with 1.3 less working days in 2005 compared to 2004. Schroeder has already fired up a public debate about the need for the country to consider dropping a public holiday marking German unification by moving it to a Sunday. "Lower growth next year is not because of slower growth," Schroeder told the council members when receiving the report, "but rather due to fewer working days." With a batch of key economic indicators having already pointed to the German economy losing momentum as it enters the new year, private economists have started revising down their 2005 growth rates for the country. The International Monetary Fund (IMF) has also downgraded German growth estimates in 2005 from 1.8 to 1.5 per cent and this year from 2 to 1.8 per cent. Equally worrying are the council's projections that unemployment in Germany could hit five million during the coming winter months, partly as a result of the government's tough labour market reforms which are to be introduced in January. "Nobody can be satisfied with this," said Schroeder about the prospects for the country's unemployment rate. Slowing growth also means that in 2005 Germany will miss the tough three per cent budget target for euro member states for the fourth year in a row with the council projecting a budget deficit next year of 3.5 per cent. "The public finances remain in a critical state," the report said with the council calling on Berlin to ensue that meeting the eurozone's fiscal rules was a key priority of its fiscal policy. Schroeder conceded, however, that meeting the three per cent target will be difficult.
