Chancellor Angela Merkel's cabinet signed off Wednesday on a hefty austerity package that critics say will hit the poorest hardest and could endanger Germany and therefore Europe's economic recovery.
The 80-billion-euro (102-billion-dollar) package of spending cuts over the period 2011 to 2014 include big cuts in unemployment and parental leave benefits, while ministers were told to tighten their belts across the board. In a poll by the television channel ARD when the plans were first unveiled in June, 79 percent of Germans said the austerity plan was not socially balanced, while tens of thousands of people took part in demonstrations. Much of Merkel's plans are also reliant on measures that are still in the works, slowed down by squabbling among ministers in her fractious centre-right coalition, in office since October. Most controversially, Finance Minister Wolfgang Schaeuble's sums foresee tapping German energy firms for billions of euros in return for extending the lifetime of nuclear plants beyond a planned shutdown in around 2020. The utility companies are putting all their considerable lobbying powers into resisting such a levy, while postponing the date on which Germany goes nuclear-free is likely to go down very badly with many voters, surveys show.
The nuclear tax was not part of what the cabinet approved.

Agencies