Germany’s coalition government is putting together a package of measures likely worth around 7 billion euros ($7.6 billion) to try to pull Europe’s largest economy out of a prolonged recession, Bloomberg reported.
Chancellor Olaf Scholz’s government wants to have the package – which would reduce the tax burden on companies – ready in time to secure parliamentary approval before the summer holidays.
While other major economies enjoy relatively robust expansion, Germany is being held back by challenges ranging from high energy costs, exposure to the struggling Chinese market and geopolitical tensions triggered by Russia’s war with Ukraine.
Economy Minister Robert Habeck announced last month that the government had cut its growth forecast for this year to just 0.2% – a much flatter recovery than the 1.3% it predicted a few months earlier.
Habeck, a member of the Greens who is also vice-chancellor, identified last year’s court ruling that changed the coalition’s budget planning as an additional factor weighing on the economy.
The government is still trying to win approval for a separate package of measures introduced last year, which was watered down by regional lawmakers and is still stuck in the upper house of parliament.
The new growth package is also designed to help reverse falling support for Scholz’s three-party governing alliance of the Social Democrats, Greens and Free Democrats, the people said.
Support for the far-right Alternative for Germany surged ahead of three regional elections in the former communist east in September. The far-right party is especially strong, ranking second nationally, ahead of Scholz’s SPD and behind only the main opposition conservatives.
2024-03-04 00:41:16