Merkel reveals details of second economic stimulus package

Merkel reveals details of second economic stimulus package
A file photo of workers building a bridge in Thuringia. Photo: DPA
German Chancellor Angela Merkel has named details of a second economic stimulus package, according to daily Neue Presse on Friday.

“A main focus will be investment in infrastructure, in schools, streets and the broadband network, for example,” Merkel told the Hanover paper, adding that the goal of package is to stimulate growth and employment. “It is close to my heart that development in the job market is at the centre of efforts,” she said.

The new stimulus package will not be voted on until January, though, and will be informally connected to the inauguration of US President-elect Barack Obama, she said.

Meanwhile Volker Kauder, head of the parliamentary group of Merkel’s conservative Christian Democrats (CDU), told financial daily Handelsblatt in an interview that a billion-euro programme for bridge renovations would be “desirable,” and could be carried out by the government. He also suggested bringing internet to “every town in our country.”

Peter Ramsauer, head of the parliamentary group of the Bavarian conservative CSU party, which has been highly critical of Merkel’s first stimulus package, told broadcaster Deutschlandfunk that her second package must include tax cuts. He also suggested spending more money in the western states in Germany, which some say have suffered as the government pumps funding into the ailing economy of the formerly communist eastern states. “We need a catch-up program,” he said.

Berlin has already created a package worth €31 billion to repair the ailing economy, but Merkel has been criticized for acting too slowly as the rest of Europe dove into new public spending plans.

The new package will be worth €40 billion, according to reports by Der Spiegel on Friday.

Recent economic reports have shown that the word’s third-largest economy is in a recession, with exports suffering and thousands of cut backs in key industries announced since the global financial crisis began.