Germany readying fiscal stimulus plans

Bloomberg

The German government is getting ready to act to shore up Europe’s largest economy, preparing fiscal stimulus measures that could be triggered by a deep recession, according to two people with direct knowledge of the matter.
The program would be designed to bolster the domestic economy and consumer spending to prevent large-scale unemployment, said the people who asked not to be identified because the discussions are private. Similar to bonuses granted in the 2009 crisis to prod Germans to buy new cars, the government is studying incentives to improve energy efficiency of homes, promote short-term hiring and boost income through social welfare, the people said.
Signs are mounting that Germany’s rigid adherence to its balanced-budget policy is softening. Finance Minister Olaf Scholz suggested the government would aim to muster 50 billion euros ($55 billion) of extra spending in case of an economic crisis. Last week, Chancellor Angela Merkel said the economy is “heading into a difficult phase” and that her government will react “depending on the situation.”
Germany’s central bank warned that the economy could be about to slip into recession, adding to the pressure on policy makers to ramp up support.