Berlin - Germany expects tough negotiations at next week's European Union summit when leaders meet to decide on a climate package and measures to combat the global financial crisis, Chancellor Angela Merkel said Thursday.

Addressing the lower house of parliament, Merkel said the proposals by the EU Commission for a 200-billion-euro (252 billion dollars) stimulus package were "in the right direction."

She told the Bundestag that Germany had already undertaken its own measures and would review the situation at the beginning of next year.

Berlin's contribution is a 32-billion-euro package over the next two years which is expected to result in a 50-billion-euro boost to consumption and investment.

The package includes higher family allowances and tax breaks for children as well as steps to encourage investment in energy- efficient buildings and incentives for car buyers.

Calling for a "quick, appropriate, but also prudent" response to the crisis, the chancellor warned that Germany would not take part in a competition for subsidies and the spending of vast sums of money.

But she said Germany would use the December 11-12 gathering in Brussels to press for changes to subsidy rules and exemptions in investment support for projects such as extending fast internet connections to rural areas.

Merkel praised the compromise reached last week in the EU on vehicle emissions, and said the bloc's climate protection programme needed to be viewed under the aspect of economic performance.

She said she expected a lively discussion at the summit on the wider issue of emissions, saying Berlin would "forcefully present its own position so that jobs are not lost in Germany."

Germany wanted the summit to be a success, she said, but there needed to be exceptions for energy intensive industries. (dpa)