German conservatives settle on tax cuts as key campaign issue | Germany| News and in-depth reporting from Berlin and beyond | DW | 28.06.2009
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German conservatives settle on tax cuts as key campaign issue

By promising tax cuts in their campaign program for September's elections, German conservatives hope to restore their popular leader Angela Merkel to power, but also to ditch their Social Democratic coalition partners.

A receipt zoomed in on teh tax component

If the conservatives win, there will be no sales tax hikes

Conservative leaders voted unanimously on Sunday, June 28, in favor of a program of moderate tax cuts and income relief for middle-class families.

With the German economy facing the prospect of shrinking by six percent this year, it's no secret that economic concerns will likely dominate the run-up to the elections on Sept. 27.

Merkel and Seehofer during a press conference, standing in front of the election motto

The conservatives' re-election campaign motto reads "We have the power"

Delegates from the Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), agreed that tax cuts should be the cornerstone of their re-election campaign and should be introduced at some point during the next legislative term.

The two parties, however, failed to agree on a date for the cuts, to the dismay of the CSU, which wanted to see the measures introduced by 2011.

The chancellor flatly rejected calls to increase Germany's sales taxes to offset income-tax cuts.

"I will not increase value-added tax in the life of the next parliament," she said bluntly after the meeting. "Right now we don't need sacrifices, we need moderate cuts."

Merkel loyalists slapped down calls from two state premiers, Guenther Oettinger of Baden Wuerttemberg and Wolfgang Boehmer of Saxony-Anhalt, to frankly tell the public about sacrifices needed to finance any tax cuts.

Sitting pretty

Shopping goods in a grocery aisle

Some conservatives wanted to increase sales tax on items that currently enjoy reduced rates

Bavarian premier and CSU chairman Horst Seehofer praised Merkel as an "excellent chancellor" and said his party would throw its full support behind her re-election.

If recent polls are anything to go by, that prospect looks highly likely three months from now.

The question for the conservatives is who will they govern with?

The latest opinion polls put the CDU together with the CSU on 35 percent of the vote. That would be just enough to win government with their preferred coalition partners, the business-friendly Free Democrats (FDP), who are expected to get 15 percent of the vote.

The center-left Social Democrats (SPD), the minority party in Germany's grand coalition government, hope to be able to hold on to power. But its dreams of forming a governing coalition with the Greens seem very distant, with the two parties currently polling 24 and 15 percent of the votes respectively.

Confusing the voters?

The uncomfortable figures, nonetheless, didn't stop the SPD from rejecting the conservatives' platform on Sunday.

The SPD's candidate for Chancellor and current Foreign Minister, Frank-Walter Steinmeier, accused the CDU of confusing voters with competing talk of tax cuts and rises.

The Opposition Greens also called the program a grab bag of policies.

The FDP said their potential allies had laid out a mix of goods on the table, but were holding back on the prices, while the Left party called the tax cuts implausible.


Editor: Toma Tasovac

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