Berlin - Plans for economy-boosting moves by Germany's government were confirmed Wednesday in Berlin by Chancellor Angela Merkel as a global recession looms.

Addressing Germany's import-export federation BGA in Berlin, she said the package would include "focussed, bold and sustained" incentives for investment rather than being just a broad-based rise in government spending.

She also stepped up pressure for next month's G20 summit in Washington to agree on a brief for negotiations on financial-market regulation. Those world negotiations ought not to take longer than a year, she said.

Germany is to boost the ailing car industry by reducing its taxes on low-emission cars, Merkel's spokesman, Ulrich Wilhelm, said.

The vehicle-tax changes to be adopted in cabinet on Wednesday next week would be part of a programme to boost the flagging economy.

The disclosure follows days of debate in Berlin about whether to increase government spending, cut taxes or both to ease the effects of an approaching slump.

The car industry in both Europe and the United States has been appealing to governments to act to revive sales.

Wilhelm gave no details but said the package would be a "well-adjusted concept."

Torsten Albig, spokesman for the Finance Ministry, said it was "concretely" planned to alter the scale of vehicle tax, so tax rates were no longer keyed to a vehicle's engine size but instead to the engine's level of emissions.

Environmentalists have pressed for the change, saying it will encourage owners of polluting older cars to scrap them and thus help reduce carbon dioxide emissions blamed for global warming.

Senior German officials have said Berlin will also offer new soft loans and grants to improve building insulation, tax deductions for home-improvement work and changes in amortization rule for taxes. (dpa)