The chancellor says the 25-billion-euro ($30 billion) program will be spread out evenly over the next four years and hopes for an immediate impact on the domestic economy, which despite favorable global cyclical conditions has been growing slower than in most other European nations.

Ministers of the grand coalition government of Christian and Social Democrats have agreed to spend an extra six billion euros alone on research and development projects. This will go toward ensuring that German spending on research accounts for at least 3 percent of GDP by 2010, in keeping with European Union guidelines.

Angela Merkel is confident that her shot in the arm for German economy will help dispel the gloom that has enveloped it for so long.

“We’ve come a little bit closer to our target of getting Germany back to being one of the top three economic performers in the European Union," Merkel said. "We need more growth to create more jobs, and our supplementary measures to reduce bureaucracy in the country will contribute towards even more growth."

She added that she hoped German industry would "listen to the signals" being sent out with the investment program and do what it can to improve the situation on the labor market.

Able to put differences behind them

Social Democrat Vice Chancellor Franz Müntefering agreed. He said the two-day strategy meeting has shown that the coalition partners, traditionally political rivals, are able to put their ideological differences behind them and hammer out deals that are in the interest of the whole country.