German car-scrapping bonus will be expanded
Güncelleme Tarihi:
The Associated Press
Oluşturulma Tarihi: Nisan 09, 2009 00:00
BERLIN - The German government is to expand funding for a popular car-scrapping bonus that has given auto sales a powerful boost, more than tripling the amount of money it originally set aside.
The Cabinet was set to approve the move yesterday after Chancellor Angela Merkel and top ministers agreed to cap funding for the program at 5 billion euros ($6.7 billion) - up from the 1.5 billion euros originally set aside.
"In view of the strong demand ... the volume will be expanded," Merkel's spokesman, Ulrich Wilhelm, said Tuesday night. He said the new funding level would cover 2 million cars, compared with 600,000 previously.
The 2,500 euros bonus for people who scrap cars at least nine years old and buy new ones was introduced earlier this year in an effort to boost the auto industry - a key part of Germany's economy, which went into recession last year. It was part of a wider 50 billion euros economic stimulus.
A German auto industry group said last week that new car registrations in the country in March soared to their highest level since 1992 thanks to the bonus, increasing by 40 percent on the year to 401,000.
By the end of last week, the number of applications had soared to 1.2 million. The government made clear that the program would be expanded, but left details open. Ministers rejected suggestions from some politicians that the level of the bonus be cut from 2,500 euros after the end of May.
Wilhelm stressed that the funding will not be expanded once the 5 billion euros is exhausted. The program will finish by the end of this year.
Exports down 23.1 percent
Meanwhile, German exports were down 23.1 percent on the year in February as the global economic crisis weighed on demand for the country's products, official figures showed yesterday. Exports totaled 64.8 billion euros ($86.3 billion) in February, while imports were 56.2 billion euros, the Federal Statistical Office said. Imports were down 16.4 percent compared with February 2008. Exports to countries in the 27-nation European Union - which accounted for nearly two-thirds of the total - were down 24.4 percent, the statistics agency said.
"In view of the strong demand ... the volume will be expanded," Merkel's spokesman, Ulrich Wilhelm, said Tuesday night. He said the new funding level would cover 2 million cars, compared with 600,000 previously.
The 2,500 euros bonus for people who scrap cars at least nine years old and buy new ones was introduced earlier this year in an effort to boost the auto industry - a key part of Germany's economy, which went into recession last year. It was part of a wider 50 billion euros economic stimulus.
A German auto industry group said last week that new car registrations in the country in March soared to their highest level since 1992 thanks to the bonus, increasing by 40 percent on the year to 401,000.
By the end of last week, the number of applications had soared to 1.2 million. The government made clear that the program would be expanded, but left details open. Ministers rejected suggestions from some politicians that the level of the bonus be cut from 2,500 euros after the end of May.
Wilhelm stressed that the funding will not be expanded once the 5 billion euros is exhausted. The program will finish by the end of this year.
Exports down 23.1 percent
Meanwhile, German exports were down 23.1 percent on the year in February as the global economic crisis weighed on demand for the country's products, official figures showed yesterday. Exports totaled 64.8 billion euros ($86.3 billion) in February, while imports were 56.2 billion euros, the Federal Statistical Office said. Imports were down 16.4 percent compared with February 2008. Exports to countries in the 27-nation European Union - which accounted for nearly two-thirds of the total - were down 24.4 percent, the statistics agency said.