Berlin - German Chancellor Angela Merkel said Wednesday that 2009 would be a gloomy year for Europe's largest economy but predicted the situation would improve in 2010.

"Germany is very strong," she told parliament. It was in a position to overcome the current crisis, she said.

Merkel said an economic stimulus package announced by her government was intended to "build a bridge" for investment and employment "until an economic recovery happens."

The world financial crisis has pushed the global economy into a tailspin, forcing Berlin and other governments to unveil stimulus packages aimed at underpinning economic growth.

Germany has also announced a 500-billion-euro (650-billion- dollar) rescue plan to help its financial sector weather the current upheaval.

Merkel said Germany was not in a position to combat all global trends and needed to act in coordination with the European Union as well as taking its own measures to overcome the economic crisis.

Berlin expects the 12 billion-euro package to result in a bigger 50-billion-euro boost to consumption and investment. The package includes steps to encourage investment in energy-efficient buildings and incentives for car buyers.

A decline in tax revenue as a result of the contraction in the economy has forced the government to boost borrowings by 8 billion euros to meet plans for spurring growth. (dpa)