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Germany plans ‘targeted measures' to boost economy

BERLIN - Berlin plans ‘targeted measures’ to boost Europe's largest economy but no major stimulus package in response to the financial crisis and slowing growth, the government said on Monday.

Chancellor Angela Merkel asked the economy and finance ministers at a cabinet meeting on Monday to develop ideas by early November to boost certain industries hit by the crisis, her spokesman Thomas Steg said.

‘The chancellor spoke out (at the cabinet meeting) specifically against a vague, traditional, wide-ranging credit and economic programme financed by new borrowing,’ Steg told a regular news conference.

‘But what could be helpful in this situation are very precise, very targeted measures to stimulate investment for certain industries,’ Steg said, adding that these should be ‘convincing, affordable and first and foremost can be put into place quickly.’

The cabinet will then decide on which measures to take while drawing up its 2009 budget, which is due to be finalised next month, Steg said. He said that, for now at least, Berlin was still aiming for a balanced federal budget by 2011.

German lawmakers passed last week a 480-billion-euro (650-billion-dollar) rescue package for the country's banks aimed at providing capital to cash-strapped lenders and guaranteeing loans.

‘The financial stability package is itself already an impulse for the real economy, something that will stabilise the economy and growth in Germany,’ Steg said.

Media reports said on Monday that the measures being considered included tax breaks for low-emissions cars and state guarantees on loans to small and medium sized companies. Steg said that no specific measures were discussed by the cabinet on Monday.