Under the plan announced by the German government late Wednesday, households will receive €300, or about $336, per child; pay a reduced value added tax on daily items; and receive a cut in their electricity bills.
The plan also includes €5.3 billion for the social security system, €10 billion to help municipalities cover housing and other costs, and €1.9 billion for cultural institutions and nonprofit groups. It includes incentives to buy electric vehicles, but none for gas- or diesel-fired engines, which Germany’s powerful automakers had sought.
The plan requires new borrowing. Ms. Merkel’s government abandoned its adherence to a balanced budget in March, when it passed a €750 billion rescue package that included taking on more than €150 billion of fresh debt. The latest package will also be financed by new borrowing, reflecting government concerns that millions of employees still need incentives to encourage spending.
Germany’s unemployment rate, 3.5 percent, is still extremely low. But one-fifth of the country’s workers are furloughed or working reduced hours because of the pandemic, with the government making up most of the lost wages. Many of those people could become officially unemployed if their employers shut down for good or reduce in size.
“We need to get out of this crisis with an oomph,” the finance minister, Olaf Scholz, said.
Ms. Lagarde, the European Central Bank president, also seems to have found her footing after some verbal gaffes early in her tenure, which began in November.
The bank, sometimes criticized by analysts for reacting too late to crises, exceeded expectations Thursday when it decided to step up purchases of government and corporate bonds by another €600 billion, or $675 billion. The bond buying helps push down market interest rates and make credit cheaper.
The decision will increase the total bond purchases promised by the central bank since the pandemic began to €1.35 trillion, which will be spent over the coming year. That is on top of stimulus measures already in place, including a program that allows commercial banks to borrow money from the central bank at a rate of minus 1 percent if they promise to lend the money on to other customers and meet certain other conditions. In effect, the central bank is paying lenders to take its money.