One of the stimulus plans for Europe is Germany's old-cars scrapping scheme. Cars older than nine years can be traded for newer ones with a €2,500 rebate. Despite the current economic crisis, and while other countries are registering significant reductions, car registrations in Germany rose by 21.5 per cent in February compared to the same month of the previous year.
One can argue that by giving such a rebate to the consumers, the German stimulus plan also has an effect on the environment by reducing harmful emissions due to environment-friendly technology.
Another interesting factor is that consumers are opting for more economical and energy efficient cars (in prevention of an oil price hike reappearance, perhaps!)
Besides tackling the environmental problem, the scheme also aids car manufacturers which would otherwise have seriously considered the option of closing down and laying off their employees.
In view of what has been said above, the current economic crisis is a window of opportunity for governments to aid similar restructuring where it can be felt most i.e. at the population level. By helping kick-start the economy, governments would engage in a win-win situation in order to restore consumer confidence.
So far Germany has proved that this option is on the cards and perhaps that it is the winning card in order to emerge from this economic situation as quickly as possible. The example provided by Germany should encourage a similar approach in other countries' economies.
One would argue that such an approach may not be limited to car manufacturing but may be utilised in other sectors of the economy where demand is falling sharply.
Well done Germany for such an innovative initiative!
Reference is being made to an article German Scrapping Scheme Provides Glimmer Of Hope ( http://euobserver.com/9/27720/?rk=1 ).