Leaders of Chancellor Angela Merkel's coalition are expected to decide next month on a new stimulus package to help Germany out of recession, a government spokesman said Monday, according to dpa. Spokesman Thomas Steg said a meeting of the coalition on January 12 was likely to give its approval to extra spending that experts predict could total 25 billion euros (35 billion dollars). Merkel's government of Christian Democrats and Social Democrats has already pieced together a raft of measures totalling about 31 billion euros to help the nation's economy weather the global economic slump. Steg declined to go into details of what the new measures might entail, but said "all options" were on the table, including help for Germany's car industry, which has been badly hit by a slump in sales. Some members of Merkel's conservative Christian Social Union ally have called for tax cuts, but this is being resisted by her Social Democratic Finance Minister Peer Steinbrueck. Steinbrueck said in a newspaper interview Monday that it would make more sense to cut wage overheads, such as health insurance contributions, pointing out that half of German households paid no income tax. A central plank of the new measures would be increased investment in infrastructure projects such as transport, educational facilities, communications and energy efficiency, he told the Ruhr Nachrichten. Steinbrueck wants to keep any new financial outlays within the limits of the European Union's Stability and Growth Pact, which restricts deficit spending to 3 per cent of gross domestic product (GDP). A preliminary meeting of Merkel's coalition on January 5 is expected to make suggestions for the new package, which will be presented to coalition leaders a week later. Berlin has made it clear that it does not intend to introduce the new measures until after US president-elect Barack Obama unveiled his proposals to underpin growth in the world's biggest economy following his inauguration later next month.
