German Govt Mulls Motor Tax Halt On Green Cars For 2 Yrs-Min

BERLIN --The German government plans to suspend for two years the motor tax for environmental new cars that are bought next year, Environmental Minister Sigmar Gabriel said Thursday on German ARD television.

"This will be the finance minister's proposal," Gabriel said, adding that Germany's 16 states still have to back the plan. At present, the states get the tax revenue that's estimated to reach EUR2 billion in 2009.

The move comes as German car companies have been hard hit by the economic slowdown and have called on the government to provide help. Several companies, including carmakers Daimler AG (DAI) and BMW AG (BMW.XE) as well as car suppliers Continental AG (CON.XE) and Bosch AG have said they will cut production.

In a separate interview with Berliner Zeitung newspaper, the parliamentary group leader of the ruling Social Democratic Party, Peter Struck, said that the government is considering growth boosting measures for the next two years that might reach EUR20 billion to EUR25 billion.

The Cabinet is set to adopt measures next Wednesday, which Chancellor Angela Merkel has said will be sector-specific and not a broad fiscal stimulus package.

Among other projects planned are aid for renovation, infrastructure projects, reintroduction of tax depreciation rules for companies and extending the period for paying short-time working benefits to 18 months from the present 12 months.

Television Web site: www.ard.de

   Newspaper Web site:   http://www.berliner-zeitung.de 

-By Andrea Thomas, Dow Jones Newswires; +49 (0)30-2888 410; andrea.thomas@dowjones.com