Germany's Merz makes a pledge against tax increases

Germany's Merz makes a pledge against tax increases

Germany's economy has been facing a challenging period, with the second quarter of the year seeing a shrinkage that exceeded expectations. Amidst this economic downturn, the centre-right Christian Democrats (CDU), led by Friedrich Merz, have taken a firm stance against tax increases.

Friedrich Merz, the Chancellor candidate of the CDU, was officially nominated as the CDU/CSU candidate in September 2024. In a recent interview with public broadcaster ZDF, Merz reaffirmed his commitment to the coalition agreement and ruled out any possibility of tax increases.

The coalition agreement, according to Merz, does not allow for tax increases. This stance is in contrast to the proposal by Finance Minister Lars Klingbeil of the Social Democrats (SPD), who is advocating for tax increases to address a €30 billion spending gap in the 2027 plans.

Merz, who is under pressure to turn Europe's top economy around, has cited excessive sick leave, stagnant productivity, and high labor costs as factors affecting Germany's competitiveness. He has suggested increasing work hours and longer workdays as potential solutions.

Markus Soeder, the CSU premier of Bavaria, shares Merz's sentiment about tax cuts. Soeder believes that such a move would help improve Germany's competitiveness.

Despite the differing views on the tax increase issue, Merz has dismissed the possibility of a "clash" in the coalition. He considers it acceptable that the SPD has a different view on the matter. No clash or disagreement has been reported within the coalition, according to Merz's statement.

Merz's interview with ZDF also addressed the negative impact of US tariffs on Germany's exports, as per official data. However, no new information about the coalition agreement or potential disagreements within the coalition was provided in this paragraph.

As Germany continues to grapple with economic issues, the stance taken by Merz and the CDU on tax increases is likely to shape the country's economic policies in the coming years.

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