German cabinet backs 50 bn euro growth plan

BERLIN: Germany's cabinet on Wednesday agreed a package of measures to give Europe's biggest economy a 50 billion euro ($64.22 billion) boost and help it weather the effect of the global financial crisis, a government source said.

The plan is designed to help ordinary Germans after the government introduced a 500 billion euro bank rescue package to help restore confidence in the financial system last month.

Measures include the provision of extra funds for small and medium-sized firms to borrow from state-owned development bank Kreditanstalt fuer Wiederaufbau (KfW), tax breaks on new cars and funding for infrastructure projects and building work.

Overall, the package is expected tol generate some 50 billion euros in investments and contracts in the next few years and aims to protect about 1 million jobs.

Germany is on the brink of recession and the government is worried that the global financial turmoil will cause a rise in unemployment before next September's federal election.