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Germany approved a €130 billion rescue package for the economy

Germany approved a €130 billion rescue package for the economy

The program provides for temporary VAT reductions, material assistance for children, and billions for transport infrastructure.

In Germany, the government has agreed on a rescue package worth 130 billion euros. This was announced by Politico on Thursday, June 4.

The program includes temporary reduction of VAT, material allowance for each child for families and assistance to local authorities experiencing lack of money, as well as plans to increase subsidies for electric cars and billions for the national transport infrastructure.

“We are trying to do our best in a very difficult situation,” Chancellor Angela Merkel said.

The negotiations between the coalition parties lasted two days. The main item in the package is the reduction of VAT to 16 percent from 19 percent from July to the end of December, and at a reduced rate to 5 percent from 7 percent. Families will also receive a lump-sum payment of €300 per child.

In addition, about €50 billion of the total stimulus fund will be used to invest in future-oriented technologies such as clean transport and low-emission vehicles.

The German automotive industry will also receive support — the government intends to increase the premium for environmentally-friendly electric vehicles to 6,000 euros from 3,000 over the next year and to invest an additional 2.5 billion euros in the infrastructure for charging stations and battery technologies.

Multibillion-dollar investments are planned in the Deutsche Bahn railway company and in public transport.

We would like to remind you that the German economy has not experienced such a crisis for over 10 years. Even a more significant drop in GDP in the country was prevented by investments in the construction sector.

It was also reported that Germany decided to buy 20% of Lufthansa airline shares. The purchase will take place as part of the airline's assistance package, which includes stabilization measures and loans of up to 9 billion euros.

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