Germany: 130 billion euros to revive the economy

German Chancellor Angela Merkel at the Bundestag in Berlin on Wednesday May 13, 2020. REUTERS / Hannibal Hanschke

Text by: RFI Follow

The coalition parties have agreed on a recovery plan of 130 billion euros for the years 2020 and 2021. On the program: lowering of the VAT, transfers of debts from the municipalities to the federal state or even allowance for families . Of this 130 billion euros, 120 will be borne by the federal state.


Read more

It is a question of "  creating a recovery which makes our country better, more sustainable, more respectful of the climate, more human  ", argued on Thursday the Minister of Economy Peter Altmaier, praising the "  biggest economic program ever realized  " by the Federal Republic.

This stimulus important, daring but expensive  ", according to Spiegel , should allow "to  come out of the crisis in beauty,  " says the daily Süddeutsche Zeitung , in unison with most experts.

The austerity champion has become a spendthrift  ", which "  would have been unimaginable a few months ago  " notes for example Carsten Brzeski, economist at ING bank.

Part for households and businesses ... 

The plan has two parts. One, endowed with 80 billion euros, is intended immediately for households, and more particularly for small and medium-sized enterprises . Twenty billion will be used to finance a general drop in VAT rates for the next six months.

Companies will benefit from tax relief during these two years. For households, 11 billion will reduce taxes on renewable energy, in order to lower the price of electricity. The plan also provides for an allowance of 300 euros per child for families.

... another for the green economy and innovation

The other part, endowed with 50 billion euros, must support the national economy, in particular in its greening and make it possible to accelerate investments for research and innovation. Faced with the climate challenge, Germany wants to invest 7 billion euros in the development of hydrogen and spend an additional 2 billion euros until 2021 for the energy renovation of buildings.

The recovery plan plans to support the severely damaged automobile sector . The members of the coalition reduced aid for the purchase of gasoline or diesel cars with low emissions, in favor of the purchase of an electric vehicle by doubling the premium which passes from 3,000 to 6,000 euros.

Support for the deployment of 5G

The plan also gives pride of place to digital, with an investment of an additional 2 billion euros in artificial intelligence by 2025 and the release of 5 billion euros to deploy “  faster  ” 5G across the board. of German territory.

The public health system will also benefit from the program, with almost 7 billion euros.

This package of measures complements the previous plan of 1,000 billion euros introduced in March, at the height of the health crisis . It provided aid to businesses and billions of euros in guaranteed loans.

Newsletter Receive all international news directly in your mailbox

I subscribe

Follow all international news by downloading the RFI application


  • Germany
  • Coronavirus
  • Economic crisis

On the same subject


Germany: Munich Protesters Protest Containment Measures

International reporting

Germany: Hotels in Bavaria Reopen


Germany: despite the deconfinement, Bavaria is pessimistic about the recovery of tourism