13 Jan 2009

New stimulus plan agreed in Germany

12:35 pm on 13 January 2009

The German government has reached agreement on a new economic stimulus package worth 50 billion euros to help the economy through what could be its worst recession since World War II.

After six hours of negotiations on Monday, Chancellor Angela Merkel and the Social Democrat Party agreed on a mixture of investment spending and tax cuts.

Coalition leaders said the focal point of the programme will be investment in infrastructure projects and education. There will also be incentives for new car purchases.

Mrs Merkel and Vice Chancellor Frank-Walter Steinmeier will present full details on Tuesday.

The government agreed on an earlier package in November, which it said was worth 31 billion euros.

A federal election is due in September.