Berlin - The German Government warned Wednesday of a surge in unemployment after it slashed its 2009 economic projections as Europe's largest economy faces up to its biggest downturn in 60 years. Berlin now expects the nation's economy to shrink by a dramatic 6 per cent this year before the country's GDP returning to growth in 2010 with feeble 0.5-per-cent expansion rate on the back of government stimulus plans.

In the meantime, the government predicts that unemployment will jump by 900,000 next year.

Wolfsburg, Germany - Germany's biggest carmaker said Wednesday that its core Volkswagen brand posted an operating loss of 279 million euros (368 million dollars) in the first quarter of 2009. The company said sales of VW models slumped 15 per cent to 765,000 and turnover dropped 20.8 per cent to 14.3 billion euros as worldwide demand for cars dropped in the face of the global economic downturn.

The 1st quarter loss compared to an operating profit of 461 million euros in the same quarter of 2008.

Volkswagen's Spanish subsidiary Seat posted a loss of 145 million euros compared to a a profit of 12 million euros in the first quarter of 2008.

Berlin- Economic confidence in Europe bounced back in April, according to key report released Wednesday, adding to hopes that the region might now have passed the trough in the current downturn. In a major test of the mood in Europe, the European Commission's closely watched economic sentiment indicator for the 16-member eurozone rose from a record low of 64.7 in March to 67.2 in April, to reach its highest level since January.

However, low inflation means that the European Central Bank is likely to press on next month with its rate-cutting cycle.

Berlin - Berlin's Jewish museum is to expand into a former flower market hall, the museum announced Wednesday. The 6000-square-metre market building opposite the museum, in the Kreuzberg district of Berlin, is to be redeveloped by New York based architect Daniel Libeskind, at a cost of 10 million euros (13 million dollars).

Libeskind won praise for designing the main museum building, shaped like a jagged lightning bolt, said to resemble a broken Star of David.

Munich - Europe's biggest insurer Allianz AG reported Wednesday a more-than-40-per-cent fall i

Berlin - Europe's biggest engineering group global Siemens AG cut its profit forecast for the current fiscal year Wednesday as its order books shrank in the face of the global economic crisis. However, shares in the German-based company rose more than 4 per cent after it announced a jump in its second quarter profits with earnings from the same period last year hit by charges.

Siemens now expects operating profit from it core business in the current fiscal year which ends on September 30 to overshoot last year's 6.6 billion euros (8.68 billion dollars.)