Berlin - Germany's government is expected to decide Wednesday to spend an extra 15 billion euros (19 billion dollars) to help ward off the worst effects of a recession, according to a cabinet paper obtained by reporters in Berlin.

The government believes the two-year programme will generate 50 billion euros in investment and consumption by Germans, the documents seen in advance by Deutsche Presse-Agentur dpa showed Tuesday.

The money will be offered in the form of tax rebates for fuel- saving new cars, tax rules that allow more rapid depreciation of business investments and extra spending on highways.

In addition, the government is to offer loan guarantees worth 20 billion euros to support smaller industrial enterprises and exports.

The government of Chancellor Angela Merkel drafted the plan after criticism that it had devoted tens of billions of euros of federal money to rescuing banks, but had not yet helped the wider economy, which is being dragged down by the financial shock.

Merkel, who faces a general election next September, told an audience of employers Tuesday, "We'll face bad news in 2009, but we are going to do something so that 
2010 will be better."

On Wednesday, she said, her government would offer "bold, targeted and sustained measures" to boost the economy. She described them as a "bridging" measures so that businesses and citizens could survive the weak period.

She told the national employers' association Tuesday that she expected Germany's export-led economic growth to ultimately recover.

The cabinet paper seen by dpa no longer contains any target date to bring federal expenditure into line with income, acknowledging that balancing the budget by 2011 is not feasible.

Merkel gave no details of the spending programme, but said she had not given up her intention of ultimately balancing the German federal budget. It was now her aim to achieve this within the life of the next parliament, which will likely hold office through 2013.

The 15 measures in the spending package for 2009 and 2010 include income top-ups that will allow companies to keep staff semi-idle for up to 18 months, a traditional German move to avert layoffs, the cabinet document showed.

The government would pump an additional 3 billion euros into a programme of soft loans to encourage homeowners to insulate buildings.

German buyers of new cars would receive a holiday from road tax for one year, doubled to two years for low-emission cars.

A grants programme for low-income local authorities would receive 3 billion euros.

Germany's gross domestic product last year was 2,423 billion euros, federal statistics show. (dpa)