Germany: Economic stimulus package gives priority to jobs

A major economic stimulus package, agreed by the conservative-social democrat coalition Government on 13 January 2009, and dubbed the “pact for employment and stability”, gives a high priority to measures to sustain employment through the current recession and encourages employers not to make staff redundant.

The package is the second major government intervention in response to the downturn and financial crisis, following a bank rescue in autumn 2008, and comes after heightened international pressure on the German Government to stimulate domestic demand, together with a rapid deterioration in a number of key areas of the economy, particularly manufactured exports.