The German government Wednesday has approved the new stimulus package for the country's economy, which has been announced by German Chancellor Merkel last week.
The total worth of the package was 50 billion euros (63 billion U.S. dollars), including the provision of extra funds for small and medium-sized companies, tax breaks on new cars and funding for infrastructure projects. It was designed to create 1 million jobs over the next two years.
"We will have difficulties in 2009," Merkel said Wednesday. "We are going to create a bridge for German economy to the time when it may get better again in 2010."
The government aims to "avoid a credit tightness for small and medium-sized companies," Economy Minister Michael Glos said. "It's a tailored economic growth package, not a classic stimulus program."
The measures will cost 23 billion euros in the four years toward 2012, of which 10.9 billion euros will come out of the federal budget, the Finance Ministry said.
It predicts that the package will stimulate German enterprises and businesses to spend an additional 50 billion euros with their own investment.
However, some analysts doubted the effects of the package, saying the package "is too small and is designed mainly for capital spending instead of consumer spending," according to the report of Bloomberg.
Two days ago, the European Commission said, Germany may face economic stagnation in 2009, when Merkel's Christian Democrats and their Social Democrat coalition partners will contest national elections. It also predicted that Germany will only have 1 percent growth in 2010.
Source:Xinhua
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