Merkel vows further stimulus step in January

Chancellor Angela Merkel said on Saturday the German government would take "a further step" in January to boost the economy after passing a stimulus package two weeks ago that was widely criticised as insufficient.
In her weekly podcast, Merkel said the government will do everything possible next year to keep the country's economy on a sound footing. She then went beyond previous signals by saying a second stimulus step would be taken in January.
"The government has already acted and launched a first package of measures to support the economy," said Merkel, who on Friday said the government would pursue a new package that would focus on infrastructure projects, such as schools and roads.
Previously, Merkel had limited her vow to say government leaders would only meet in January to review the situation. "We'll take a further step in January," she said, confirming for the first time concrete measures were on the way.
However, she added: "They must be carefully prepared because we want to ensure that they are applied in precisely those areas where jobs can be saved or created. Our goal is to make Germany fitter, after the crisis, for 21st century challenges."
Finance Minister Peer Steinbrueck, in an interview to be published on Sunday in the Welt am Sonntag newspaper, also signalled a change of heart about further stimulus measures after long expressing staunch opposition.
Germany, the world's biggest exporter of goods last year and Europe's largest economy, has slipped into recession and could face its worst post-war contraction if it shrinks as much 4 percent in 2009, as leading economists have forecast.
Merkel, leader of the Christian Democrats, and Steinbrueck, a deputy leader in the Social Democrats, have faced criticism from abroad for their reluctance to contribute more to international efforts to support flagging economic growth.
They have also endured attacks from both their parties for resisting stimulus measures. On Saturday Merkel was criticised again by her Christian Social Union sister party. Deputy CSU leader Karl-Theodor zu Guttenberg said she was too hesitant.
On Friday, newsmagazine Der Spiegel had reported the next stimulus package would total 40 billion euros - but include the 12 billion euros in the first package approved two weeks ago.