Merkel ditches tax cuts after regional poll slap
Source: Agencies |
May 11, 2010, Tuesday
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Print Edition
Print Edition
ACKNOWLEDGING a "bitter defeat" in a state election, German Chancellor Angela Merkel yesterday abandoned hopes of pushing through tax cuts and said her government would concentrate on keeping Germany's debt down.
Merkel's center-right coalition lost control of Germany's most populous state, North Rhine-Westphalia, in Sunday's election, which erased its majority in the upper house of parliament.
"There's no talking around it - we suffered a bitter defeat," said Merkel.
The defeat followed a stumbling start for Merkel's new national coalition government, which took power in October.
It has squabbled constantly over the wisdom of tax cuts to stimulate the economy and faced sharp criticism for its handling of the Greek debt crisis. Merkel long took a hard line on aid to Greece - which is unpopular at home - but pushed it through parliament last week.
"Many arguments were avoidable," Merkel said of her government's first few months. "The ... coalition in Berlin must now set its priorities clearly. That means, from my point of view, firstly that tax cuts cannot be implemented for the foreseeable future. Consolidating the budget will become the priority."
Merkel said tax cuts likely wouldn't be possible for at least the next two years.
Early and big tax cuts were a pet project of her junior coalition partner, the pro-business Free Democrats.
However, they are opposed by opposition parties, which will now be able to block legislation in the upper house - a chamber that represents Germany's 16 states and must approve much major legislation.
Merkel's center-right coalition lost control of Germany's most populous state, North Rhine-Westphalia, in Sunday's election, which erased its majority in the upper house of parliament.
"There's no talking around it - we suffered a bitter defeat," said Merkel.
The defeat followed a stumbling start for Merkel's new national coalition government, which took power in October.
It has squabbled constantly over the wisdom of tax cuts to stimulate the economy and faced sharp criticism for its handling of the Greek debt crisis. Merkel long took a hard line on aid to Greece - which is unpopular at home - but pushed it through parliament last week.
"Many arguments were avoidable," Merkel said of her government's first few months. "The ... coalition in Berlin must now set its priorities clearly. That means, from my point of view, firstly that tax cuts cannot be implemented for the foreseeable future. Consolidating the budget will become the priority."
Merkel said tax cuts likely wouldn't be possible for at least the next two years.
Early and big tax cuts were a pet project of her junior coalition partner, the pro-business Free Democrats.
However, they are opposed by opposition parties, which will now be able to block legislation in the upper house - a chamber that represents Germany's 16 states and must approve much major legislation.
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