Germany plans $64 billion stimulus package

The German government plans a two-year program of investments and incentives to provide a 50 billion- euro ($64-billion) boost to the economy, wracked by a freeze in global credit markets.

``Measures to safeguard companies' financing and liquidity are provided by funding investments worth slightly more than 20 billion euros,'' according to a joint paper by the economy and finance ministries obtained by Bloomberg News. They ``will encourage investments and orders by companies, private households and municipalities totaling about 50 billion euros.''

Chancellor Angela Merkel said yesterday the government will enact ``broad'' measures to bolster the economy. The government has so far been divided on whether to offer tax cuts or boost spending and the Cabinet will discuss the package on Nov. 5. Germany last month slashed its growth forecast for 2009 to 0.2 percent, compared with a 1.7 percent estimate for this year.

The paper, dated Oct. 31, suggests the government is seeking to fund measures with increased borrowing and ``accept cyclical revenue shortfalls or higher expenditures to the full extent.'' The government will fail to meet its target of balancing the federal budget by 2011 because of the ``changed economic environment,'' the document said.

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2. Japan announced a 27 trillion yen ($275 billion) stimulus package

Sources :

Bloomberg: Germany Plans $64 Billion Boost to Economy Via Stimulus Program , November 2, 2008 07:29 EST

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