Unemployment Data Expected to Show Further Losses

Germans will receive 300 euros, or about $336, per child, and pay a reduced value added tax on daily items and less for electricity, under a €130 billion stimulus plan announced by Chancellor Angela Merkel’s government.

Ms. Merkel called the package, which was agreed to late Wednesday, a “bold response” to the pandemic downturn.

The plan also includes €5.3 billion for the social security system, €10 billion to help municipalities cover housing and other costs and €1.9 billion for cultural institutions and nonprofits. It includes incentives to purchase electric vehicles, but none for gas- or diesel-fired engines, which Germany’s powerful automakers had sought.

The plan requires new borrowing. Ms. Merkel’s government abandoned its adherence to a balanced budget in March, when it passed a €750 billion rescue package that included taking on more than €150 billion of fresh debt. The latest package will also be financed by new borrowing, reflecting government concerns that millions of employees still need incentives to encourage spending.

“We need to get out of this crisis with an oomph,” the finance minister, Olaf Scholz said.

China steps back in airline dispute one day after U.S. vowed retaliation.

The Chinese authorities on Thursday appeared to retreat partially from an escalating dispute with the United States over air travel between the two countries, announcing that foreign airlines would be allowed to operate one flight per week in Chinese cities.

The announcement, from China’s civil aviation regulator, followed the Trump administration’s announcement on Wednesday that it would block Chinese passenger airlines from flying into or out of the United States starting on June 16. That move was a response to a similar ban by the Chinese government on American carriers, which had further stoked tensions between the world’s two biggest economies.

Foreign airlines that were barred from operating in China during the pandemic — which includes all American airlines except those carrying cargo — will be allowed to choose one Chinese city from an approved list to operate one flight each week, beginning June 8, the announcement said. The pandemic and Chinese restrictions had effectively halted passenger trips to China by United Airlines, Delta Air Lines and American Airlines.