Berlin - Germany's lower house of parliament on Friday approved a record 50-billion-euro (65 billion dollars) stimulus package aimed at helping the country fight its way out of recession.

The measure passed easily because Chancellor Angela Merkel's grand coalition enjoys a comfortable majority, but it could run into trouble next week in the upper house where the government does not have a majority.

Opposition Free Democrat (FDP) leader Guido Westerwelle called the package disappointing and ineffective, and said it would saddle the nation with a huge debt.

Experts believe new borrowing will have to be raised to around 50 billion euros to finance the measures, a mixture of tax cuts and public investment in infrastructure projects.

Finance Minister Peer Steinbrueck said the government saw no alternative to increased borrowing in view "of this historic, almost unique situation."

Germany has pledged to cut new public borrowing by 2020 as part of a deal to win support for the new measures, which were approved by the cabinet at the end of last month.

The package, the biggest of its kind since the end of the Second World War, includes modest cuts to income tax aimed at encouraging people to spend. Other provisions see increased family benefits and reductions in contributions to health and unemployment insurance.

There will also be spending on roads, schools and railways, infrastructure projects which could take time to materialize but which are likely to have long-term positive effects.

Another incentive aimed at helping the country's struggling automobile industry offers 2,500 euros to motorists willing to scrap their old car and buy a new one.

The measures follow a 31-billion-euro stimulus late last year, which analysts said was not enough to cushion Europe's largest economy from what looks like being its deepest recession in decades.

Figures released by the Federal Statistics Office Friday showed the German economy shrank by 2.1 per cent in the final quarter of 2008 compared with the third quarter, the largest for any quarter since German unification in 1990. (dpa)