The parties within Germany's coalition government agreed on a €130-billion stimulus package late Wednesday, aimed at rebooting the national economy after weeks of pandemic paralysis. The program will include temporary cuts to VAT, a per-child financial allowance for families, and assistance for cash-strapped local authorities, along with plans to boost subsidies for electric cars and spend billions on national transport infrastructure.

In terms of tax cuts, from July to the end of December this year, German value-added tax will be reduced from 19% to 16%, and the preferential tax rate for some commodities (food, publications, etc.) Families will also receive a one-off payment of €300 per child under the rescue package. Some €50 billion of the total stimulus fund will be targeted at investments in future-focused technologies such as clean transport and low-emission vehicles.

On support for Germany’s hulking car industry, the government is set to ramp up its purchase premium for pure electric vehicles to €6,000 from €3,000 through next year and put an extra €2.5 billion into e-charging infrastructure and battery technology. There will also be a multibillion-euro investment in railway company Deutsche Bahn and public transport.

The program also includes plans to spend €1 billion on funding cleaner aircraft that emit less air and noise pollution, the government said. Meanwhile, a scrappage scheme will be aimed at replacing older diesel trucks.