It is reported that German parliament has approved a EUR 50 billion stimulus package aimed at boosting its economy.

The plan was approved by a majority of members of the Bundesrat upper house, which represents Germany's 16 states. Once signed by President Mr Horst Koehler, the package will become law.

Stricken firms are granted EUR 100 billion in loan guarantees. The new measures also include some EUR 17 billion in infrastructure spending as well as about EUR 18 billion in tax cuts for individuals and businesses.

The package comes a year after a EUR 31 billion stimulus plan, which was criticized for being too small to lift the German economy out of its worst recession since World War II.

Ms Angela Merkel German Chancellor said that "We are operating on the principle that Germany is strong and therefore can come to terms with this difficult economic situation. We will see to it that Germany emerges stronger from this crisis than it entered it. With the biggest package in the history of the federal republic of Germany, we are also living up to our international responsibilities."

Official data released recently showed that the German economy contracted by 2.1% in the final quarter of 2008, the biggest slump since East and West Germany unified in 1990. It may be noted that Germany entered recession in the third quarter of 2008 as the global downturn weakened domestic consumer spending and hit demand for exports. The government has forecast the economy will shrink by 2.25% in 2009.

(Sourced from www.presstv.com)