Germany Agrees To $30 Billion Investment Plan To Kick-Start Growth

The German government agreed on Jan. 10 to invest 25.2 billion euros (US$30 billion) in transport and research over the next four years as a means of kick-starting growth in the eurozone's biggest economy, even at the price of breaking EU budget rules for yet another year.

The new government under Chancellor Angela Merkel had agreed on the principle of such a program at the end of October. She pledged to implement the measures rapidly with the aim of turning Germany back into one of the three leading economies in Europe within 10 years.

Around six billion euros have been earmarked for investment in research and development and some 4.3 billion euros for investment in transport and infrastructure.

Under the terms of the EU's Stability and Growth Pact, countries in the euro zone are not allowed to run up deficits in excess of 3% of gross domestic product (GDP). But the German deficit has breached that limit every year since 2002.

Copyright Agence France-Presse, 2006