The German government has said the country will suffer its deepest recession since World War II this year.
Germany's economy, which accounts for about a third of euro zone output, will contract by about 2.25% in 2009, the government said, as the sharp global slowdown hits demand for the country's exports.
By the end of the year, the government expects another half a million Germans to be out of work.
'This economic downturn that we are unfortunately having to predict is without precedent in the post-war period', Economy Minister Michael Glos told a news conference.
The new forecast came as Chancellor Angela Merkel's cabinet discussed a €50 billion stimulus effort.
The package, the biggest in modern German history, includes a huge increase in spending on roads, railways, hospitals and schools. Other elements include cuts in tax and social security contributions, as well as incentives for consumers to buy new 'greener' cars.
Glos said that this programme, together with similar efforts being made around the world, would begin to help the German economy in the second half of 2009. Germany entered a recession in the third quarter of 2008.
