Germany : a stimulus plan to boost the economy of 130 billion euros unveiled - The Point

This is a stimulus plan in history. While its economy has been weakened by the crisis of the coronavirus, Germany unveiled Wednesday, June 3, a stimulus plan of

Germany : a stimulus plan to boost the economy of 130 billion euros unveiled - The Point

This is a stimulus plan in history. While its economy has been weakened by the crisis of the coronavirus, Germany unveiled Wednesday, June 3, a stimulus plan of 130 billion euros over two years. This plan has the ambition not only support the offering through the reduction of the tax on the added value or new aid to undertakings in difficulty, but also the demand for grants to families or an increase in the premium for the purchase of electric cars.

These investments must be made now " because we want to make the future possible, particularly for the next generations ", said Wednesday evening Angela Merkel, after two days of intense negotiations between conservatives and social-democrats, the government coalition partners. "So we have an economic recovery plan, a plan for the future and, of course, in addition to this, we now attend to our responsibility for Europe and the international dimension ", is welcomed.

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"We want to come out with impetus for this crisis"

She was thus alluding to the project that it currently carries with the president of france Emmanuel Macron to establish debts mutualised between countries of the EU to boost the european economy in the face of the sars coronavirus. Even if Germany has, until now, been less affected than its neighbours by the pandemic on the human level, with some 8 500 people, its economy, highly dependent on exports, was greatly shaken. "We want to come out with momentum of this crisis," he has followed the Olaf Scholz, minister, social democrat Finance.

This recovery plan adds to the huge body of more than 1,000 billion euros put in place in march, at the height of the pandemic, providing aid to businesses and billions of euros of loans guaranteed. Among the measures announced Wednesday include, in addition to the temporary reduction of the VAT from 19% to 16% until 31 December 2020 (7% and 5% for the reduced rate) and transfers of debts of municipalities to the federal State, a one-time payment of € 300 per child for families or even a decrease in the cost of electricity to individuals, according to the agreement of 15 pages.

Read also Germany : for the love of Europe

The automotive sector is injured ?

The most discussed has been the introduction of a bonus with the purchase to support the auto sector, virtually shut down for several months. The social democrats (SPD), who opposed any grant of polluting cars, seem here to have won the battle : in the end, the members of the "grand coalition" voted against a bonus with the purchase of cars petrol or diesel with low emissions.

On the other hand, the bonus with the purchase of an electric vehicle will be doubled, rising from 3 000 to 6 000 euros. This decision may grind teeth in this vital sector in Germany, which depend on 800 000 jobs. But, unlike the crisis of 2009 a premium purchase for all types of vehicles had been put in place, the German automotive, undermined by the scandal of the engine-fixing and criticized for his shift late to the electric, has lost influence in the face of the growing importance of environmental concerns and climate.

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"Opportunity squandered"

The agreement promotes, however, the acceleration of the renovation of the buildings for years to come : the program encourages, in particular, the installation of heating systems more climate-friendly will now increase to one billion euros to be raised to 2.5 billion. One of the representatives of the radical left, Die Linke, Bernd Riexinger, has, however, spoken of " opportunity wasted ", considering that the measures of support for social were not sufficient.

While Germany has seen its unemployment rate continue to climb in may, to 6.3 %, pushing the companies to seek partial unemployment to more than 11 million workers since march, the government wanted to bring his support to undertakings in difficulty. Up to 25 billion euros will be released to help the sectors most affected. Angela Merkel justified this aid to support the millions of workers currently unemployed in part : "This shows how the whole (of the economy) is fragile, and that it is necessary to succeed in stimulating the economy so that jobs are insured. "

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Date Of Update: 04 June 2020, 12:33

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