In an interview with Focus magazine, Eichel also criticised the work ethic in Germany, saying it was incomprehensible that a country with more than four million unemployed people still has to import seasonal workers.

"If we don't do these reforms we'll go bankrupt," Eichel said, according to an advance text of the interview.

Chancellor Gerhard Schroeder's government has faced sharp public criticism and weekly demonstrations against planned cuts in jobless and welfare benefits. The ruling Social Democrats are expected to suffer a series of election defeats in September.