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Merkel backs extension of car scrapping scheme

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Merkel backs extension of car scrapping scheme
Photo: DPA
16:29 CET+01:00
German Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier said Wednesday they would consider extending Abwrackprämie, or scrapping premium, due to its “great success” in helping the nation's ailing auto industry.

Both politicians made their comments on the sidelines of a cabinet meeting, and inside sources said both made it clear that a quick decision on the matter was not forthcoming.

The programme, also called the “environmental bonus,” offers Germans €2,500 to junk their old car and buy a new one. Worth €1.5 billion, it was included in the country's second stimulus package passed earlier this year.

Car sales have reportedly increased significantly since the scrapping bonus came into effect on February 20. As of March 25, some 346,741 applications have been filed, according to the Federal Office of Economics and Export Control (BAFA), which processes the applications on behalf of the Economy Ministry.

But the scheme was only set to be available as long as funds lasted – enough for 600,000 applications. Media reports on Tuesday said the government plans to discuss the extension during a coalition committee meeting after Easter, and that most of the finance and economy officials had already given their consent.

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