The German government has announced an economic stimulus package worth 50 billion euros, with the primary objective of averting a credit squeeze for small and medium sized companies.
The European Commission says next year, an election year, will see German economic stagnation. Chancellor Merkel hopes her SPD finance minister’s sums are right.
“The idea that injecting a lot of money, or everything we’ve got, will help a lot is’nt how we’ve been thinking. We’ve been asking how can we best target spending, how much leverage will this sum have on relaunching the economy in such a tough economic downturn?”, says Peer Steinbruck.
Germany’s unemployment has just tipped over three million again for the first time in 16 years, and union unrest in Germany’s key industrial, manufacturing, and transport sectors is growing.
Critics say the plan is too little too late, the equivalent of a sugar rush rather than sustained medium-term support, and will stimulate capital rather than consumer spending.