German Chancellor Gerhard Schroeder has condemned the growing use of 'offshoring' - outsourcing business services to cheaper, poorer countries.

Schroeder said offshoring reduced things that are necessary and important for Germany to "narrow, micro-economic questions", the Financial Times reports. His comments raise the possiblity of government action to stem the jobs outflow.

German non-wage labour costs are the world's highest, after Norway. Siemens is meeting union officials at the end of the month to find ways to reduce its labour costs and stop jobs moving abroad. Up to 10,000 jobs are at risk, unions say. ®

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