Angela Merkel seals $145 bn stimulus to lift battered economy

BERLIN: Chancellor Angela Merkel’s coalition agreed on a sweeping ¤130 billion ($145 billion) stimulus package designed to spur short-term consumer spending and get businesses investing again.

The wide-ranging plan to lift Germany out of the crisis unleashed by the coronavirus exceeded the top end of expectations by 30%.

Alongside an immediate jolt from a temporary reduction in value-added tax, coalition officials allocated money to build out 5G data networks, improve railways and double incentives for electric vehicles.

In one of the most contentious issues in the talks, the auto industry fell short of its goal of getting direct government support for purchases of conventional cars, as Merkel sent a signal that she intends to take a longer term view in fostering a recovery of Europe's largest economy.

“We couldn’t just set out a stimulus package that was done in the traditional sense,” said Merkel late Wednesday in Berlin.