CHANCELLOR Helmut Kohl gave notice late last night of drastic austerity measures to trim public spending in Germany at federal, regional and municipal level.

In a televised interview, Dr Kohl did not detail such plans, but said. "If we are unable to set priorities now, we will not pass the test."

This was interpreted as an allusion to the criteria Germany must fulfil - but currently does not meet, notably in its budget deficit to be able to join in a single European currency.

Dr Kohl warned employers against scrapping collective agreements with trade unions, calling on both sides of industry to join in talks on how to cut costs and favour employment.

He insisted a union proposed "alliance for jobs" was not "dead".