Berlin – The German government unveiled a €10 billion economic package on Thursday to pay for additional unemployment benefits and new tax cuts to help businesses affected by the coronavirus.

The measures come as Europe's largest economy takes it first steps back towards normality with a number of businesses opening up for the first time in a month, and politicians declaring the coronavirus "under control".

Workers forced to stay at home by the pandemic and government measures to contain it will now receive between 70% and 77% of net salary from the fourth month of unemployment, a 10% increase on previous provisions.

From the seventh month, they will receive between 80% and 87%.

Those already unemployed will see their benefits extended for a further three months this year.

The coalition government also announced that VAT on the gastronomy sector – which has been hard-hit by closures of restaurants and cafes – would be cut from 19% to 7% for one year from 1 July.

With many schools closed and expected to re-open gradually, the government also said it would provide financial support to families to purchase a computer for online lessons. Those in greatest need can receive up to €150.

The new injection comes on top of a total programme of support for the German economy of some €1,100 billion, consisting mainly of public guarantees for business loans.

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