So the economy can start again

The government wants to pass an economic stimulus package on Tuesday. A lot can go wrong. It depends on three criteria.

Scholz, Maas and Merkel in the Bundestag at the end of April

HHas Germany not had excellent experiences with economic stimulus packages? The financial crisis came in 2008, something most people in Germany can just remember. At that time there was short-time working, a child bonus, the scrapping bonus for buying new cars – and after a few months Germany had its real economy back on its feet. It seems so natural that today we hardly think about the basics of an economic stimulus package.

On Tuesday afternoon, the coalition leaders meet in the Chancellery to decide on the aid. It’s going to be a long night session where in the end everything will be thrown together into a great compromise. The first outlines are already emerging. The controversial purchase premium for cars will probably come in some form, including a one-off payment for families who had to look after their children for months and are now allowed to stimulate the economy. There will be support for the cities and municipalities that have lost their business tax as well as further payments for hard-hit industries because the previous aid will expire in the next few days. And firms will probably be able to deduct their current losses from tax more quickly.