Germany's governing coalition has agreed to a $146 billion stimulus package meant to soften the economic impact of the coronavirus pandemic.
Despite the haggling over the details, the spending-adverse German government has changed course dramatically since the crisis hit, opening up its pocketbook in a bid to stabilize the economy.
The decision was made after Chancellor Angela Merkel held separate phone calls with Chinese President Xi Jinping and European Council President Charles Michel, government spokesman Steffen Seibert said on Wednesday.
The measures were agreed by Merkel's Christian Democratic Union, its Bavarian sister party, the Christian Social Union, and junior governing partner, the center-left Social Democrats following marathon negotiations that lasted 21 hours.
To boost consumer spending, Value-Added Tax will be cut from 19% to 16% from 1 July to 31 December this year, a move that will cost the German government €20bn alone.
Families will receive a one-time transfer of €300 for each child.
It also also foresees doubling incentives for electric cars purchasing, improving railways and building out 5G data networks.
Businesses will benefit too.
The stimulus programme follows a 750-billion-euro rescue package agreed by the German government in late March to mitigate the damage of the pandemic.
Merkel has said the support programme will help "the economy to find its feet and grow again".
Meanwhile, companies in sectors hardest hit by the crisis - including hospitality, tourism and entertainment - will receive "bridging help" worth 25 billion euros in total from June to August.
Under the measure, restaurants, hotels or event management companies could get up to 80 percent of their fixed operating costs reimbursed if revenues had plunged by more than 70 percent compared to a year ago.