German Chancellor Angela Merkel says governing parties have agreed on a €130 Billion stimulus package to help revive the economy hit by the coronavirus pandemic. There will be a wide range of measures enforced that might have the value-added tax to be temporarily slashed. The measures include temporarily cutting value-added tax form 19% to 16%, providing families with an additional €300 per child and doubling a government- supported debate on electric car purchases.
A €50Billion fund will be allocated to addressing climate change, innovation and digitization within the German Economy. The measures were agreed by Merkel’s Christian Democratic Union, its Bavarian sister party, the Christian Social Union, and junior governing partner, the centre-left Social Democrats following marathon negotiations that lasted 21 hours.
Angela Merkel said members of her coalition had committed to an audacious program that will boost consumer spending, invest in innovation and ease the financial strain on the ordinary Germans. “It’s clear that all of this requires a bold response,” Merkel told reporters in Berlin. “It’s about securing jobs, and keeping the economy running, or getting it going again.”
The German government began loosening its restrictions with heads of the different German states taking the reins in making sure that the members of their state stay safe and that the number of infections do not spike leading to reinstating the lockdown. The level of unemployment has risen from to 6.3% from 5.8% over the past month. The figure would have been significantly higher had it not been for a government program that allowed companies to reduce the hours and wages of more than 7 million employee in return for keeping them in their jobs.