A supplementary budget by the German government to stimulate the economy is expected to breach a cap on public spending imposed by the European Union, some officials in Berlin said Sunday.

Speaking a day before the three parties in Chancellor Angela Merkel's coalition meet to discuss injecting 50 billion euros ($68 billion) into the economy, a finance ministry spokesman said whatever was decided would be promptly put into effect.

 

The federal government is expected to spend somewhat less than 50 billion euros, but argues that grants and tax cuts could seed that amount in additional spending during this year and next.

 

While the ministry offered no comment on the effects of the supplementary budget, research staff of the Christian Democratic caucus in parliament reportedly suggested the bill this year might be 30 billion euros.

 

The return on savings dived to a record low last month as figures showed deposit accounts pay average interest of less than 1 per cent.

Figures from the Bank of England revealed that the interest paid on notice accounts, tax-free Individual Savings Accounts (Isas) and bonds last month was the lowest since records began in 1995.

And the average return on instant access accounts was just 0.81 per cent, it said.

It is the latest evidence of how savings rates have fallen drastically following consecutive cuts in the Bank rate.

It comes as The Daily Telegraph campaigns for savers, particularly pensioners, to be offered tax cuts on the income they earn on their savings.

GERMAN automaker Volkswagen set a sales record in 2008 and expanded its market share in key markets the United States and Germany despite a global economic crisis.

And the company is aiming for another banner year in 2009, said executives at the North American International Auto Show, where VW unveiled its first two-seater roadster with much glitz and fanfare.

"We have kept our promise,'' said chair Martin Winterkorn. "The Volkswagen Group delivered more vehicles than ever before in the difficult year of 2008.

"With growing shares on the world market and major single markets, including Germany and the USA, we expanded our position further.

"This shows that our group's multi-brand strategy is paying off and our young and attractive model range is popular with customers all over the world.''

'GBP' Erased, Is this common knowledge in the UK? |  Telegraph | 12 Jan 2009

Reform plan raises fears of Bank secrecy

he Government is set to throw out the 165-year old law that obliges the Bank to publish a weekly account of its balance sheet - a move that will allow it theoretically to embark covertly on so-called quantitative easing. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel's Government in 1844 which originally granted the Bank the sole right to print UK money.

The ostensible reason for the reform, which means the Bank will not have to print details of its own accounts and the amount of notes and coins flowing through the UK economy, is to allow the Bank more power to overhaul troubled financial institutions in the future, under its Special Resolution Authority. ...

The Bank said it will still publish details of its balance sheet, but, significantly, the data - the main indicator of the extent of quantitative easing - will not be presented until more than a month has elapsed. For instance, under the new terms of the law, if the Bank were to have embarked on a policy of quantitative easing last month, the figures on this would not be published until the end of this month.