- Germany could launch a fresh package of stimulus of as much as €100 billion to defend against the coronavirus, Bloomberg reported, just days after the EU proposed a €750 billion 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 ($83.9 billion) and €80 billion ($89.4 billion), 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 ($112 billion) to fight the economic impact of coronavirus,just days after the EU published its own historic €750 billion ($826 billion) 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 ($55.6 billion) to €100 billion ($112 billion).
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 while Merkel's party prefers to keep the new stimulus limited.
Bild said the total amount of the package will range between €75 billion ($83.9 billion) and €80 billion ($89.4 billion), significantly lower than the top figure cited by Bloomberg.
The European Union last week proposed a recovery package valued at €750 billion (about $826 billion), 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 subsidizing profitable carmakers.
The government may introduce a sales bonus which incentivizes 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 ($5.6 billion) car-buyer bonus scheme.
The plan would give €2,500 ($2,790) per car, and this would be topped up by €500 ($559) for fuel-efficient vehicles.
Other measures that are reportedly being considered include a rescue fund worth €57 billion ($63.7 billion) to help struggling municipalities pay off their debts, and an increase in family subsidies, which would see every family given €300 ($335) per child, up from around €200 ($224) now.