Funded by a massive surge in government borrowing and comprising direct cash injections as well as far-reaching loan guarantees, the steps to help companies, workers and households are expected to be voted through by both houses of parliament by the end of the week.
“We're showing that right from the beginning we will fight with all our might against this crisis calling into question healthcare for our citizens or economic activity in this country,” Finance Minister Olaf Scholz said at a Berlin press conference.
MPs in the Bundestag (lower house of parliament) are expected to wave through the package on Wednesday, while it should pass the second house representing Germany's federal states on Friday.
On top of the €122 billion in direct spending, including €50 billion to support small businesses and €55 billion for fighting the pandemic, Germany will also set up a protective shield for workers and companies.
The measures will mean the government will offer a total of around €822 billion of guarantees through public investment bank KfW for loans to companies, as well as extending social programmes like top-up pay for workers placed on shorter hours.
What exactly will the package cover?
The support package covers a number of areas: Small companies and self-employed people such as artists and carers are to receive direct grants of up to €15,000 over three months.
A so-called stabilisation fund will provide credit to companies, and the state will be able to take a stake in the companies if necessary.
In addition, landlords will no longer be allowed to evict to their tenants if they cannot pay their rent due to the corona crisis.
In the case of Hartz IV welfare applications, the property audit and the examination of the amount of the rent paid for the apartment are to be suspended for six months.
Families with low income are also slated to receive child supplements more easily.
Expanded regulations on reduced working hours will also make it easier for companies to keep employees instead of sending them into unemployment.
Germany's hospitals are to be supported with more than €3 billion.
Cabinet also decided that the federal government should have more powers in the field of epidemic control, that insolvency law should be relaxed and that companies and associations should be allowed to hold their annual and general meetings online.
Chancellor Angela Merkel (CDU) took part in the cabinet meeting by telephone, as she has been in quarantine in her private apartment in Berlin since Sunday evening. A doctor who had vaccinated her on Friday had tested positive for the coronavirus.
Speaking alongside Scholz, Economy Minister Peter Altmaier warned the crisis could slash German GDP this year by “at least as much” as during the 2008-9 financial crisis, when it plunged five percent.