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| The German economy is stagnant. (Source: Shutterstock/esfera) |
The federal government 's statement said the expected tax cuts of more than 30 billion euros would ease the burden on small and medium-sized businesses.
Specifically, in the first year, this stimulus package will reduce federal government tax revenue by 2.6 billion euros, the state revenue by 2.5 billion euros and the autonomous regions by 1.8 billion euros.
German Chancellor Olaf Scholz said the country needs to deal with its "sick" economy to stimulate growth.
According to the head of government, the tax cuts are part of a 10-point program to boost growth and make it easier for companies to decide to invest in Germany.
The new stimulus program will encourage companies to undertake new environmentally friendly investment projects, provide tax incentives for research activities and introduce regulations that are more beneficial to businesses' bottom lines.
The stimulus package comes amid a slowdown in the German economy, which recorded zero growth in the second quarter of 2023 after falling into a technical recession earlier this year. The main reason was the heavy impact of the Russia-Ukraine conflict, which sent energy prices soaring after Berlin stopped importing gas from Moscow.
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