He called for more money to be invested in public services and works such as education, environmental technology and infrastructure to try to counter the financial downturn.

“There is no reason to sound the all-clear, in fact just the opposite,” he told the Thüringer Allgemeine newspaper on Saturday.

“We should be prepared for mass job cuts to start in the late summer or autumn.”

He said the government should take concrete steps to increase the spending power of the general public, to stimulate the economy.

And social security payments to those who lose their jobs should be increased, he argued, so that those on Hartz IV receive €435 a month, and that those on the more generous unemployment benefits can receive them for a year if they had previously worked for at least a year.

Tax increases on company profits, those with large fortunes, and on inheritance, should be raised to fund the increases, he suggested.

Bsirske’s warning came just a day after car parts supplier Schaeffler admitted it would be cutting 8,000 jobs, 5,000 of which will be in Germany.

The struggling family-owned company, which overstretched itself by taking over competitor Continental last summer, has had thousands of workers on short shifts, but that is obviously not saving enough money.

Information has emerged that the company will hold a meeting with workers’ representatives on Tuesday, followed on Wednesday by meetings in all factories to inform workers of the plans.