German Chancellor calls for an expansion of stimulus programme

With the threat of the majority of the euro zone falling into recession the German Chancellor, Angela Merkel, has indicated that the 50 billion euro package that has been sanctioned to boost the German economy should be expanded.

The economy grew by 1.7 percent this year but predictions indicate that the economy is unlikely to grow in 2009.

The German economy is going to feel the full effect of the current economic crisis in the first quarter of 2009, with short term measures likely to have little affect in sustaining the economy.

The stimulus programme actually goes against Merkel’s goal of balancing the federal budget within the next 3-4 years, hence her reluctance to pay for the programme, although advisers have indicated that the programme is essential, despite the fact that payment has yet to finalised.

She has announced that the government will review their options and make further proposals.

The five member panel of economists have released the latest figures that reveal just how dire the German economy will be in 2009 as the number of unemployed is likely to continue to spiral with an average of 3.3 million in 2009.

German unemployment peaked in 2005 at 12.6 percent, although it is expected to get close to that landmark as Germany aims to dust itself off through the current economic crisis.

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