German FDP Seeks Changes To Stimulus Package

The package is meant to shield Germany from what threatens to be its deepest recession since World War Two.

Germany's Free Democrats (FDP) plan to use their sharp gains in a regional election on Sunday to push for changes to an economic stimulus package agreed by Chancellor Angela Merkel's coalition earlier this month.

The FDP, which favours small government and free markets, was the big winner in an election in the western state of Hesse on Sunday and is expected to form a ruling coalition there with Merkel's conservatives.

That would give the FDP more votes in the Bundesrat upper house of parliament, where Germany's 16 states are represented, allowing it to block legislation like the new 50 billion euro ($66.29 billion) stimulus package.

The package, which combines new investments in infrastructure with modest tax relief and measures to boost the car industry, is meant to shield Germany from what threatens to be its deepest recession since World War Two.

FDP Treasurer Hermann Otto Solms told the Monday edition of the Leipziger Volkszeitung newspaper that his party would push for bigger tax cuts and the scrapping of a measure in the package that would reward Germans who trade in their old cars for new, more environmentally friendly vehicles.

"We don't want to block, but improvements are urgently needed," Solms said of the package.

The FDP saw its support in Hesse surge to 16.2 percent from 9.4 percent just one year ago. The vote in the western state, which is home to Germany's financial capital Frankfurt, was a re-run of a 2008 election which produced no clear winnner.

To hold on to power in Hesse, Merkel ally and longtime state premier Roland Koch, a Christian Democrat (CDU), is now expected to form a coalition with the FDP.

With Hesse, five of Germany's biggest states containing over two-thirds of the country's population, would be ruled by regional alliances of Merkel's conservatives and the FDP.

The result boosted hopes within Merkel's conservative camp that a similar centre-right alliance may be possible at the national level after a federal election in September.

That would allow Merkel to ditch her current coalition partner, the centre-left Social Democrats (SPD) with whom she has ruled in a loveless partnership since 2005.