Thanks to last year's boom, Germany, Europe's biggest economy, currently has the highest number of employed people since reunification just over 20 years ago.

Economic growth of 3.7 percent in 2010 resulted in a record number of 40.5 million people having jobs, out of a population of 82 million.

Although unemployment figures rose slightly in December, Labor Minister Ursula von der Leyen said Tuesday there was "no reason to worry," attributing the increase in jobless figures by 85,000 to the "unusually early and harsh winter."

Crisis overcome

According to the labor minister, Germany had emerged stronger from the economic crisis, and robust growth will continue in 2011.

"Unlike in early 2010, when growth was primarily driven by booming exports, we are now seeing rising domestic consumption as the motor of economic development," she said.

The figure of 824,000 vacant positions in Germany was 27 percent more than in 2009, she said, "a strong indication that companies have begun hiring people but find it increasingly difficult to get them."

Clouds on the eurozone horizon

German economists also said economic expansion in the country would continue at a pace of more than 2 percent in 2011.

However, greater efforts must be undertaken "to rein in the debt-crisis in many eurozone countries" and member states must "urgently reform Europe's financial institutions," according to Gustav Horn, the director of the Macroeconomic Institute in Duesseldorf.

"The upswing in the German economy isn't sustainable yet. If eurozone countries' fiscal problems worsen, Germany, too, might fall back into stagnation," he told journalists in Berlin on Tuesday.

"Without the German boom, the growth rate in Europe would just be about 0.6 percent, meaning the continent still hasn't overcome stagnation," he added.

Horn said the German government had to do more to increase people's spending power which would help other European countries to export more and overcome the crisis more quickly.

This view was echoed by Von der Leyen, who called on German companies to raise wages so that workers could participate in the economic upswing.

Author: Uwe Hessler (Reuters, dpa)
Editor: Rob Turner