Germany Rescue Package to Lift Economy

28 Jan, 2009

Chancellor Angela Merkel’s government agreed to implement a second economic stimulus package on Tuesday, Jan. 27. The program calls 50 billion euros ($66 billion) worth of investments, aid to businesses and tax breaks. The stimulus program, agreed to by Merkel’s Christian conservatives and Social Democratic Party earlier this month, calls for tax cuts and investment in roads and railways as well as schools. The package is intended to lift Germany out of its most severe postwar recession. The program now goes to parliament where it is expected to pass with little resistance. An earlier set of measures that the government valued at 31 billion euros and approved in November was widely criticized as insufficient to revive Europe’s biggest economy. The plan calls for altering Germany’s automobile tax in favor of more environmentally friendly cars while having little effect on larger cars, which tend to emit more greenhouse gasses. As of July 1, emissions will play a larger part in determining how much tax car owners pay for their vehicles The Cabinet also approved a new 2009 budget that calls for 26.8 billion euros worth of new debt — nearly double the 18.5 billion euros initially expected for 2009. Funds set up to provide financial help to private industry could cost Germany an additional 21 billion euros. (credit: www.dw-world.de)

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