The largest stimulus package in postwar German history — and the second such package since the start of the current financial crisis — was passed on Friday by the German parliament’s lower house, the Bundestag. The bill calls for €50 billion in public investments, tax breaks and even cash handouts to junk old cars. It now heads for a vote by the upper house of parliament in a week. As a result of the package, Germany will have to take a record of €36.8 billion in new loans for 2009.
The ruling grand coalition of conservative Christian Democrats and left-leaning Social Democrats came to an agreement on the package in record time. Germany’s new economic minister, Karl-Theodor zu Guttenberg, defended the towering amounts before the vote in Friday’s session. “We’re doing this for the people in our nation,” he said, who can expect the government to intervene when markets fail because certain people have “sinned” out of excessive greed.
The market-oriented Free Democrats (FDP) opposed the package as expensive and ineffective.
Don’t have time at the moment to do the comparisons, U.S. versus Germany, stimulus as percentage of GDP. Fifty billion Euros strikes us as still smaller, relatively, than the claims to be less than $800 billion U.S. bill.
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