Germany will from next year need to initiate an exit strategy from stimulus measures introduced to stem the effects of a sharp recession, Economy Minister Rainer Bruederle said on Thursday. "We will need an exit strategy from next year," Bruederle told the Bundestag lower house of parliament, adding it would take two to three years for Europe's biggest economy to reach the level of prosperity seen in 2008.

Europe's biggest economy emerged from its deepest post-war recession in the second quarter of 2009, when the economy grew 0.4 percent from the prior three months, and the rate of expansion picked up to 0.7 percent in the July-September period.

However, fresher data points to a stuttering recovery and Bruederle said last week growth in the first quarter of this year could also be close to zero. The German government introduced a number of measures to help boost the economy, including car incentives and help for firms to keep workers on part-time but economists fear the economy may suffer as the effects wear off.

There is also pressure to consolidate a bulging budget deficit. In parliament, Bruederle also called for moderate wage deals in forthcoming talks. "Keep negotiating in a responsible way," Bruederle said. "Measured wage agreements are important, anything else would put the economic recovery at risk."

Copyright Reuters, 2010