Monday 19 March 2018

Merkel vows to fight against tax hikes in Germany if re-elected

German Chancellor Angela Merkel
German Chancellor Angela Merkel

German Chancellor Angela Merkel said today that she is against tax rises of any kind in Germany, a timely stance given the electoral campaign due in September.

Merkel has previously said she is opposed to tax increases of the kind proposed by the opposition Social Democrats (SPD), who want to make the wealthy pay more, but the strong comments show she may be thinking more broadly about taxes.

"(For many voters the election is) about a stable euro, jobs - if possible for everyone, a strong economy for our country," Merkel said in an interview with her own conservative Christian Democrats' television channel. "For that you need reliable conditions. That means tax rises are wrong. Of any kind."

Merkel, who has preached austerity to eurozone countries during the currency bloc's debt crisis, argues that raising taxes will not necessarily yield higher tax revenues.

Although most pollsters expect Merkel to win a third term in the September 22 vote, it is unclear whther she will be able to continue her centre-right alliance with the Free Democrats who favour low taxes.

She may have to seek a "grand coalition" with the SPD, and tax policy could be one of the thorniest issues in any talks between the parties.

Merkel nearly squandered a huge poll lead in 2005 by pledging during the election campaign to raise value-added tax (VAT) to 18pc from 16pc.    

The conservatives' lead fell from 42pc in opinion polls to 35.2pc in the vote, partly due to Merkel's VAT pledge, forcing them into an unwanted partnership with the SPD.

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