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Coronavirus: Germany developing £72bn stimulus package

German chancellor Angela Merkel. Photo: MARKUS SCHREIBER/POOL/AFP via Getty Images

Germany is working on a coronavirus recovery stimulus package worth up to £75bn ($92.6bn).

The coalition government led by chancellor Angela Merkel would provide £58bn whilst the nation's regional states would stump up the rest, according to Sunday newspaper Bild am Sonntag.

Finance Minister Olaf Scholz from the co-governing Social Democrats (SPD) and Economy Minister Peter Altmaier from Merkel’s Christian Democrats (CDU) are expected to present the economic recovery package next week, reports Reuters.

The scheme could include tax cuts, cash handouts to families, additional funds for small companies, debt relief for local districts and subsidies for the car industry, in line with policy maker proposals.

The fiscal stimulus package would be in addition to a £675bn rescue scheme agreed in March. Both initiatives are attempts to prop up Europe's largest economy, which is expected to plunge into the steepest recession since World War Two.

Wolfgang Schaeuble, president of the German parliament, urged for the stimulus plan to focus on climate policy, digitisation and innovation.

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“It is crucial not just to announce large sums of money, but to do the right thing,” he told Frankfurter Allgemeine Sonntagszeitung (FAS).

“Some people think that climate policy must now take a back seat. But that cannot be seriously advocated,” he said.

One sticking point has been cash incentives for customers buying new cars, a scheme already implemented in France.

Schaeuble said such an initiative was “unimaginative” echoing comments from industry groups that have spoken out against environmentally contentious schemes.