• Germany's news in English

Berlin planning 'targeted measures' to boost economy

AFP · 20 Oct 2008, 13:45

Published: 20 Oct 2008 13:45 GMT+02:00

Facebook Twitter Google+ reddit

Chancellor Angela Merkel asked the economy and finance ministers at a cabinet meeting on Monday to develop ideas by early November to boost certain industries hit by the crisis, her spokesman Thomas Steg said.

"The chancellor spoke out (at the cabinet meeting) specifically against a vague, traditional, wide-ranging credit and economic programme financed by new borrowing," Steg told a regular news conference.

"But what could be helpful in this situation are very precise, very targeted measures to stimulate investment for certain industries," Steg said, adding that these should be "convincing, affordable and first and foremost can be put into place quickly."

The cabinet will then decide on which measures to take while drawing up its 2009 budget, which is due to be finalised next month, Steg said. He said that, for now at least, Berlin was still aiming for a balanced federal budget by 2011.

German lawmakers passed last week a €480-billion ($650-billion) rescue package for the country's banks aimed at providing capital to cash-strapped lenders and guaranteeing loans.

"The financial stability package is itself already an impulse for the real economy, something that will stabilise the economy and growth in Germany," Steg said.

Media reports said on Monday that the measures being considered included tax breaks for low-emissions cars and state guarantees on loans to small and medium sized companies. Steg said that no specific measures were discussed by the cabinet on Monday.

On Thursday, Economy Minister Michael Glos slashed his forecast for 2009 growth to just 0.2 percent from his previous projection of 1.2 percent, the slowest rate of growth since the 2003 recession when output shrank 0.2 percent.

But the ministry's predictions were more optimistic than some: earlier last week leading economic think tanks drew up a worst-case scenario whereby German GDP could actually contract by as much as 0.8 percent in 2009.

Deutsche Bank meanwhile forecasts that output in Germany - which makes up around a third of the eurozone economy - will shrink by 1.5 percent in 2009 and that the eurozone as a whole will contract by 1.4 percent, the Financial Times Deutschland said.

Story continues below…

According to the Bundesbank in its latest monthly report, the German probably stagnated in the third quarter. "In view of the sharp slowdown in global economic growth and increased uncertainty resulting from the crisis on the international financial markets, the German economy likely stagnated in the third quarter," the central bank wrote in its October report.

In the second quarter of 2008, German gross domestic product (GDP) shrank by 0.5 percent on a quarterly basis and a number of economists had been forecasting a further drop in the second quarter.

The technical definition of recession is two consecutive quarters of negative growth.

Facebook Twitter Google+ reddit

Today's headlines
Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German town, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd