Nov. 5 (Bloomberg) -- The German Cabinet meets in Berlin today to seal plans for a two-year program of incentives and investment aimed at providing a 50 billion-euro ($65 billion) boost to the slowing economy hit by the global credit freeze.

The mix of subsidies, loans, tax relief and increased infrastructure spending are intended to ``bridge'' the economy over the financial crisis to 2010, targeting investment, tax relief and the labor market, Chancellor Angela Merkel told a conference of the BDA employers' federation yesterday.

A joint paper drawn up by the Finance and Economy Ministries dated Oct. 31 states that the steps will generate ``investment and sales'' of 50 billion euros, yet is imprecise on the financial scope of the individual steps.

The total includes legislative steps already agreed Oct. 7 before the financial crisis escalated. Those measures, worth 6 billion euros in 2009, include a higher children's allowance, greater tax exemptions for families with children and a reduction of mandatory unemployment-insurance contributions.

The Cabinet meets from 9:30 a.m. to discuss the plan.

The following is a summary of the main points as outlined in the joint ministries' paper:

Focus on tax relief:

a/Expanding tax relief on company investment in goods to 30 percent from 20 percent.

b/Additional tax relief for small- and medium-sized company investment as supplement to a/.

c/Expansion of tax rebate for private homes that engage tradesmen for repairs or modernization.

Focus on Investment:

a/Low-interest credit for companies from the KfW Group development bank worth a total 15 billion euros.

b/Exempting owners of new cars from vehicle tax for one year providing the cars are bought from Nov. 5 this year. Extension of the exemption for vehicles that fulfill the European Union's emission levels 5 and 6.

c/Switch from setting car tax according to motor capacity to level of carbon-dioxide emissions from 2011.

d/Expanding European Investment Bank research and development credit for the car industry to 10 billion euros annually from 7.2 billion euros today.

e/Additional 3 billion euros in subsidies for energy- efficient construction projects.

f/Supplement of 3 billion euros for the KfW bank's municipal infrastructure program.

g/Undisclosed additional federal investment in ``urgent'' road and rail projects.

h/One-off investment of 200 million euros in regional economic programs.

Focus on the labor market:

a/New program to train poorly qualified workers and retrain older workers.

b/Boost Federal Labor Agency work-placement staff by 1,000.

c/Extend unemployment payments for short-time staff such as construction workers to 18 months from 12 months.

Source: Federal Finance Ministry, Economy Ministry.

To contact the reporter on this story: Brian Parkin in Berlin at bparkin@bloomberg.net.

Last Updated: November 5, 2008 02:32 EST