Merkel launches Stimulus Package For German economy

This news updete by www.zeenews.com

Berlin: The German cabinet approved a stimulus package on Wednesday to help Europe's biggest economy and the world's top exporter avoid the worst effects of a sharp global slowdown, the Finance Ministry said.

Germany, which accounts for a third of euro-zone activity, is widely expected to enter a serious slowdown and may already be in a technical recession if, as expected, output is found to have fallen for the second straight quarter in the July to September period.

Last Monday, the widely-watched Ifo indicator showed business confidence dropping in October to its lowest point in more than five years, and the government has slashed its 2009 growth forecast to just 0.2 per cent, the slowest rate of growth Germany last suffered a recession in 2003.

Chancellor Angela Merkel has stressed that any measures would be "targeted", with Berlin highly critical of proposals by French President Nicolas Sarkozy -- whose country holds the current EU presidency -- for Europe-wide state intervention on a massive scale.

Instead the package, which the finance ministry said today would cost USD 30 billion, is smaller-scale, focusing on tax breaks, state-backed loans for companies and infrastructure projects to keep economic activity ticking over ahead of a hoped-for recovery in 2010.

Berlin also wants to combine the measures with progress on reducing the country's carbon footprint by hiring construction firms to make public buildings such as schools and hospitals more energy efficient, and through tax incentives on cars, particularly low-emission models.


Via news