German Chancellor Angela Merkel announced yesterday a second, €50 billion economic stimulus package, consisting of a combination of tax cuts, spending measures and infrastructure investments focusing on schools, roads, hospitals, internet broadband and climate change and “green” technology initiatives. This comes on the heels of a €31 billion stimulus package passed late last year. Reports indicate that the depth and scope of Germany’s recession – the worst since World War II – required these additional funds. This newest stimulus package will be the largest in Europe.
In addition, the German government has also reached agreement to create an additional €100 billion fund of state loans or loan guarantees to support local companies that face difficulty obtaining loans from the troubled banking sector.