21 Dec 2008

Further stimulus step in January for Germany

8:07 am on 21 December 2008

Chancellor Angela Merkel says the German government will take "a further step" in January to boost the economy.

Germany is already in recession and a stimulus package worth 12 billion euros passed two weeks ago has been widely criticised as insufficient.

In her weekly podcast on Saturday, Mrs Merkel said the government will do everything possible next year to keep the country's economy on a sound footing and there would be a second stimulus in January.

On Friday, she said the government would pursue a new package that would focus on infrastructure projects, such as schools and roads.

Mrs Merkel has ruled out tax cuts before the September election.

Separately, the Leipziger Volkszeitung newspaper reported on Saturday the new stimulus package would be about 20 billion euros and earmarked for investment spending.

On Friday, Der Spiegel newsmagazine reported the next stimulus package would total 40 billion euros, including the 12 billion euros in the first package.