BERLIN (AP) -- The German government decided Wednesday to expand funding for a popular car-scrapping bonus that has given auto sales a powerful boost, more than tripling the amount of money originally set aside for the plan.
Chancellor Angela Merkel's Cabinet agreed to cap funding for the program at euro5 billion ($6.7 billion) -- up from the euro1.5 billion originally set aside.
Merkel's spokesman, Ulrich Wilhelm, said the new funding level would cover 2 million cars, compared with 600,000 previously.
The euro2,500 ($3300) bonus for people who scrap cars at least nine years old and buy new ones was introduced earlier this year in an effort to boost the auto industry -- a key part of Germany's economy, which went into recession last year. It was part of a wider euro50 billion economic stimulus plan.
A German auto industry group said last week that new car registrations in the country in March soared to their highest level since 1992 thanks to the bonus, increasing by 40 percent on the year to 401,000. At the same time, exports fell by a quarter.
The government made clear over the past two weeks that the program would be expanded, but left details open. By the end of last week, the number of applications had soared to some 1.2 million.
Ministers rejected suggestions from some politicians that the level of the bonus be cut from euro2,500 after the end of May.
However, officials insisted Wednesday that the funding will not be expanded once the euro5 billion is exhausted, and that the program will finish by the end of this year.
"After that, it's over," said Economy Minister Karl-Theodor zu Guttenberg. He warned "those who want to see an endless shower of money" against expecting more.
He urged potential applicants to "examine very sensibly whether it is actually necessary."
Critics have charged that the program -- introduced as the government prepares for elections in September -- benefits auto makers at the expense of sales in other industries and may just delay a slump in car sales.
"Now people are buying more cars, but less sofas or flat-screen televisions," Wolfgang Franz, the head of the government's independent panel of economic advisers, told ZDF television.
The effect of the program "is a flash in the pan," Franz said. "Next year, either less cars will be sold or people will save elsewhere."
The expansion of the program still needs parliamentary approval, but that is unlikely to pose difficulties.
