German unemployment is unlikely to be too badly affected by the job cuts since Citigroup has already sold off its German division. Yet the German stock exchange, the DAX, followed the rest of the world's markets in taking a dip in early trading on Tuesday, Nov. 18.

The DAX was off nearly 2.4 percent shortly before 1p.m. local time. France's CAC 40 and London's FTSE were also down, while trading on Russia's two main stock markets was suspended after both lost nearly five percent on Tuesday morning.

European indexes were following the lead of exchanges throughout Asia, which all suffered significant losses on Tuesday.

"Market eyes are on global recession fears," Kazuhiro Takahashi, general manager at Daiwa Securities SMBC, told the AFP news agency.

Takahashi added that last weekend's global economic summit in Washington had done little to assuage investors' fears that the world's economy was slipping into decline.

Shrinking powerhouse

There was no good news coming from predictions about Asia's largest economy, Japan.

On Tuesday, the Organization for Economic Cooperation and Development forecast that the Japanese economy was likely to shrink by 0.1 percent in 2009. Some economists think those figures will be even worse.

The OECD's estimation reflects the mood of doom and gloom among Japanese government officials, one day after the country officially entered recession.

"In reality we see few factors that would contribute to positive growth" Economic and Fiscal Policy Minister Kaoru Yosano told reporters on Tuesday. "If I judge what is happening honestly, I have no confidence at all now that there will be positive growth."