Germany Mulls Stimulus Measures to Offset Coronavirus Impact
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Germany is looking at a range of measures to address economic damage from the spread of the coronavirus and protect its key export sector from a global slowdown.
The government’s plans would seek to improve conditions for doing business, including reducing the tax burden on companies and boosting tax relief for digital investment, Economy Minister Peter Altmaier said Thursday at a news conference in Berlin, adding that the measures are not an economic-stimulus package “in the classical sense.”
Existing instruments like export credits and other loans could help ease the pain, and the government would ensure enough money was available in case there was a sudden surge in demand, he said.
“We are not yet experiencing any extensive slump in supply and demand in Germany,” Altmaier told reporters. “That’s why it’s right that the Economy Ministry does what is needed in a decisive and prudent way and avoids sowing panic.”
Still, Altmaier warned that Germany is in “a period of growing uncertainty” and said he could not rule out downwards revisions to growth forecasts.
The Finance Ministry earlier declined to comment on the measures, which were first reported by the Handelsblatt newspaper.
Germany is on high alert, with Health Minister Jens Spahn calling the spread of the deadly coronavirus the beginning of an epidemic that is destined to get worse. The country has 40 confirmed cases after 14 additional ones were reported on Thursday evening by the health ministry for the state of North Rhine-Westphalia. All of the new cases, who live in the town of Gangelt, near Duesseldorf, have been sent home in quarantine, the ministry said in the statement.
The DIHK industry group warned earlier on Thursday that the spread of the disease will have a significant impact on German growth this year.
“Already Germany’s export industry can feel that the coronavirus is hurting global trade, and many firms are holding back on investment in many of their locations,” said Volker Treier, the DIHK’s head of foreign trade.
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