Germany Needs Stimulus of Up to $162 Billion, Merkel Ally Says

(Bloomberg) -- German Chancellor Angela Merkel’s government should finance a stimulus plan worth as much as 150 billion euros ($162 billion) to help offset the economic fallout from the coronavirus crisis, Bavarian state leader Markus Soeder said.

Measures taken by the Merkel administration, including an existing $610 billion liquidity program for companies, are insufficient, Soeder said. His comments come as the government is considering additional aid for small companies and self-employed people, local media reported.

“I honestly say, there must be more. I believe that we will need a big finance and growth package on the national level of at least 100 billion euros, in the end probably 150 billion euros”, Soeder said on Thursday in the Bavarian state parliament in Munich.

The liquidity program which Merkel’s government lined up last week might be useless because many banks would no longer be able to provide the necessary loans, said Soeder, who at one point was considered a potential candidate to succeed Merkel.

According to Spiegel news magazine, the government is planning to earmark 40 billion euros in additional aid for self-employed people as well as small companies. Thereof, 30 billion euros would be loans to troubled companies.

The ifo Institute on Thursday forecast that Europe’s largest economy could shrink by between 1.5% and 6% this year.

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