PARIS, Oct 6 - German Finance Minister Hans Eichel expects the German economy to pick up by the end of the year and to show a clearly visible recovery next year, he told the French newspaper La Tribune in an interview published on Monday. "The general expectation is for a pick-up by the end of the year and for a clearly visible recovery next year," he told the business daily. "But these are only expectations. With our policies we are doing all we can to turn these expectations into reality," he added. The German government's official growth forecast for this year is 0.75 percent and two percent next year, but many economists consider the forecasts optimistic. Asked whether Eichel believed Chancellor Gerhard Schroeder's Social Democratic-Green government would survive until the end of the legislative period in 2006, he said: "Yes, because it is brave enough to implement the necessary reforms in this country." He added: "I support this government's policies of reforms entirely." Left-wing rebels in Schroeder's party said on Sunday they would defy the chancellor's pro-business reform measures in parliament, raising doubts as to whether the government can survive a crucial vote on October 17.
Schroeder said last week he was staking his future on his reform legislation, threatening to quit if his coalition of Social Democrats and Greens fail to back in parliament the plans he says are vital to jump-start the sluggish economy. Schroeder's coalition holds only a slim 306-297 seat majority in parliament and he has said his government would collapse if the coalition fails to support him. Eichel also said the Group of Seven industrial nations at its meeting in Dubai had referred to the issue of global trade balances, when calling for more exchange rate flexibility. "We have to reduce them in all prudence, small step by small step and we all have to participate in that," he said. "Until now, the depreciation of the dollar has almost only affected the euro, and to eliminate imbalances, we have to be careful that a single region in the world does not carry the entire burden of the adjustments," he said. The G7 in September took aim at Asian governments that keep a tight grip on their currencies and called for more exchange rate flexibility to help iron out global imbalances//