German Chancellor Angela Merkel said that the ruling coalition approved, on Wednesday, a 130 billion euro stimulus package aimed at accelerating the recovery of Europe's largest economy from the emerging Corona virus pandemic.

The coalition partners resolved their differences over incentives to buy new cars and provide aid to the heavily indebted municipalities, which paves the way for a program of public spending much larger than similar incentive packages approved by German partners in the euro area.

Merkel said the stimulus package includes cutting VAT rates to boost consumption.

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