Germany is planning a fresh, massive coronavirus stimulus package
- Germany could launch a fresh package of stimulus of as much as 100 billion euros (R1.9 trillion) to defend against the coronavirus, Bloomberg reported, just days after the EU proposed a 750 billion euro (R14 trillion) pan-European plan.
- Germany is reportedly considering measures such as aid for families, car subsidies, to name a few.
- German newspaper Bild said the total amount of the package will range between 75 billion euros (R1.4 trillion) and 80 billion euros (R1.5 trillion), significantly lower than the top figure cited by Bloomberg.
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Germany is reportedly planning a fresh domestic stimulus package worth as much as 100 billion euros (R1.9 trillion) to fight the economic impact of coronavirus, just days after the EU published its own historic 750 billion euro (R14 trillion) rescue plan.
Bloomberg reports that German Chancellor Angela Merkel will host a meeting at 8:00 a.m. ET with her party, the Christian Democratic Union, and the Social Democrats - who help form Germany's coalition government - to discuss the bailout.
One source told Bloomberg they will try to negotiate a deal in the range of an additional 50 billion euros (R963 billion) to 100 billion euros (R1.9 trillion).
This is the second time Merkel's government has launched stimulus after having done so in March when coronavirus was spreading.
Different measures being considered are debt relief for struggling regions of Germany, aid for families with child cash bonuses and incentives to stimulate car sales.
German finance minister Olaf Scholz is considering extending a programme called "Kurzarbeit," which is a state-regulated worksharing unemployment insurance, according to local newspaper Bild.
The confidential source said the Social Democrats favour spending closer to $112 billion (R1.9 trillion) while Merkel's party prefers to keep the new stimulus limited.
Bild said the total amount of the package will range between 75 billion euros (R1.4 billion) and 80 billion euros (R1.5 trillion), significantly lower than the top figure cited by Bloomberg.
The European Union last week proposed a recovery package valued at 750 billion euros (R14 trillion), to help the 27-member bloc survive the economic carnage of the coronavirus pandemic.
The official process for negotiations will kick off with informal discussions between the European governments, followed by the first formal discussion in the Eurogroup on June 11.
Germany's new stimulus measures would stand alone from the EU package, and focus on the domestic economy, with measures likely to be proposed including incentives to boost the country's vital car industry.
Germany's economy minister Peter Altmaier is said to be in favour of subsidising profitable carmakers.
The government may introduce a sales bonus which incentivises drivers to opt for cleaner, less polluting-vehicles, such as low-emission diesel cars, the confidential source told Bloomberg.
Reuters reported Sunday the German ministry of economics has proposed a 5 billion euros (R86 billion) car-buyer bonus scheme.
The plan would give 2,500 euros (R48,000) per car, and this would be topped up by 500 euros (R9,000) for fuel-efficient vehicles.
Other measures that are reportedly being considered include a rescue fund worth 57 billion euros (R1 trillion) to help struggling municipalities pay off their debts, and an increase in family subsidies, which would see every family given 300 euros (R5,000) per child, up from around 200 euros (R3,000) now.
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