Germany is planning a fresh $112 billion domestic coronavirus stimulus package, just days after the EU launched its historic $826 billion plan


Germany is reportedly planning a fresh domestic stimulus package worth as much as 100 billion euros ($US112 billion) to fight the economic impact of coronavirus, just days after the EU published its own historic 750 billion euro ($US826 billion) rescue plan.

Bloomberg reports that German Chancellor Angela Merkel will host a meeting at 8:00 a.m. ET with her party, the Christian Democratic Union, and the Social Democrats – who help form Germany’s coalition government – to discuss the bailout.

One source told Bloomberg they will try to negotiate a deal in the range of an additional 50 billion euros ($US55.6 billion) to 100 billion euros ($US112 billion).

This is the second time Merkel’s government has launched stimulus after having done so in March when coronavirus was spreading.

Different measures being considered are debt relief for struggling regions of Germany, aid for families with child cash bonuses and incentives to stimulate car sales.

German finance minister Olaf Scholz is considering extending a programme called “Kurzarbeit,” which is a state-regulated worksharing unemployment insurance, according to local newspaper Bild.

The confidential source said the Social Democrats favour spending closer to $US112 billion while Merkel’s party prefers to keep the new stimulus limited.

Bild said the total amount of the package will range between 75 billion euros ($US83.9 billion) and 80 billion euros ($US89.4 billion), significantly lower than the top figure cited by Bloomberg.

Read More:

MORGAN STANLEY: The market’s hottest stocks are in danger of being disrupted to a degree not seen since the Great Recession. Here’s how to adjust your portfolio for the coming shift.

The European Union last week proposed a recovery package valued at 750 billion euros (about $US826 billion), to help the 27-member bloc survive the economic carnage of the coronavirus pandemic.

The official process for negotiations will kick off with informal discussions between the European governments, followed by the first formal discussion in the Eurogroup on June 11.

Germany’s new stimulus measures would stand alone from the EU package, and focus on the domestic economy, with measures likely to be proposed including incentives to boost the country’s vital car industry.

Germany’s economy minister Peter Altmaier is said to be in favour of subsidizing profitable carmakers.

Read More:

BANK OF AMERICA: Buy these 13 under-the-radar tech stocks poised to outperform amid flaring China tensions and lasting pandemic damage

The government may introduce a sales bonus which incentivizes drivers to opt for cleaner, less polluting-vehicles, such as low-emission diesel cars, the confidential source told Bloomberg.

Reuters reported Sunday the German ministry of economics has proposed a 5 billion euros ($US5.6 billion) car-buyer bonus scheme.

The plan would give 2,500 euros ($US2,790) per car, and this would be topped up by 500 euros ($US559) for fuel-efficient vehicles.

Other measures that are reportedly being considered include a rescue fund worth 57 billion euros ($US63.7 billion) to help struggling municipalities pay off their debts, and an increase in family subsidies, which would see every family given 300 euros ($US335) per child, up from around 200 euros ($US224) now.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.