Bundesbank chief: Germany needs more flexible labour market

BERLIN (Reuters) - The next German government should boost flexibility in the labour market, the head of the Bundesbank Jens Weidmann said in an interview published on Sunday, making it easier to fire employees and creating more incentives to work.

Less job protection should be combined however with better packages for those laid off, he told newspaper Die Welt am Sonntag.

Sweeping labour and welfare reforms introduced by Chancellor Angela Merkel's predecessor, Gerhard Schroeder, had boosted flexibility, Weidmann said, but focused on particular areas of the labour market such as temporary workers or part-time workers.

He also cautioned against excessive state investment, noting that while the state could help out in tight spots, "this should not give it a licence to make new debts."

(Reporting by Alexandra Hudson)