• Germany's news in English

Economists slam Merkel's tax relief plans

AFP/The Local · 21 Nov 2009, 17:39

Published: 21 Nov 2009 17:39 GMT+01:00

Facebook Twitter Google+ reddit

Merkel "promised us that the government would do everything so that our gloomy forecasts would not happen... They can therefore pack up their beautiful gift baskets," Wolfgang Franz, head of the so-called "Five Wise Ones" panel, told the latest edition of Der Spiegel magazine.

The influential group of economists has forecast growth of 1.6 percent for 2010, which it says is not enough to replenish the public coffers. Two weeks ago they criticised the lack of "concrete information" from the new centre-right government about their plans to reduce the deficit and deal with expected massive drop in tax revenue.

A tax relief package, already voted on by the German parliament amounting to some €8.5 billion ($12.6 billion), is set to take effect in January.

In the panel's annual report released earlier this month, the economists issued a sharp attack on the new government saying its plans to reduce the country's ballooning debt were "vague" and "deceptive."

Merkel, re-elected in September at the head of a new coalition, failed to recognise the scale of the challenges facing Europe's biggest economy, it said. In particular the new coalition of conservative Christian Democrats (CDU) and pro-business Free Democrats (FDP) has failed to spell out how it will reduce Germany's budget deficit and an "exit strategy" for reducing massive stimulus measures propping up the economy, the panel said.

Michel Fuchs, deputy head of the CDU parliamentary group, called the panel's criticisms "not only presumptuous and false, but also dangerous."

But Franz stressed the economic panel was an independent body without a political agenda. "We deliberately express ourselves in terms that are clear and not very diplomatic," Franz told Der Spiegel. "Our mandate is to warn against bad developments, not to sing someone's praises."

Story continues below…

He said "the government cannot rely only on growth, which will not be enough to generate the €37 billion which we estimate are needed between now and 2016 to consolidate" the public finances.

Data from the national statistics office earlier this month indicated that the German economy made a comeback in the second and third quarters of 2009 from its worst post-war recession, in large part owing to huge injections of cash - some €80 billion - from the state.

AFP/The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

18:14 November 21, 2009 by mixxim
Please will Merkel stand for election in the UK next May, we could certainly do with her.

(You can have Gordon Brown!)
03:26 November 23, 2009 by Davey-jo
All these economists merrily humming to themselves that the recession is over and they can go back to business as normal. Where has all that bad debt gone to? Why it's gone to the bad bank. And what is the bad bank going to do with it? Why it's going to be an albatross round your neck for twenty years.... And who is going to pay that bad debt? why you are ...dumbnuts...
13:23 November 23, 2009 by bobthebob
Wish we have like Merkel here in UK.
09:28 November 24, 2009 by jlmcnamara
Damned if you do, damned if you don't. Public spending is at an all time high in Germany. That should probably be cut back somewhat and give the folks a break. Of course it won't last long.
Today's headlines
Obama to visit Berlin in last presidential trip to Germany
President Barack Obama and Chancellor Angela Merkel during a Berlin trip in 2013. Photo: DPA.

The White House announced on Tuesday that US President Barack Obama will be paying one last unexpected visit to the German capital - his last before he leaves office.

Hostility towards minorities 'widespread in Bavaria'
A village in southern Bavaria. Photo: DPA.

Hate and hostility towards groups deemed to be different are not just sentiments felt by fringe extremists, a new report on Bavaria shows.

Hated RB Leipzig emerge as shock challengers to Bayern
RB Leipzig. Photo: DPA

RB Leipzig's remarkable unbeaten start to the Bundesliga season has seen them suddenly emerge at the head of the pack chasing reigning champions and league leaders Bayern Munich.

Munich taxi driver in hospital after attack by British tourists
Photo: DPA

A taxi driver had to be hospitalized in Munich on Monday evening after three British tourists refused to pay their fare and then attacked him.

German police carry out nationwide anti-terror raids
Police outside a building in Jena during raids on Tuesday. Photo: DPA

Police forces in five German states carried out raids on Tuesday morning with the aim of tackling the financing of terror groups, police in Thuringia have reported.

The Local List
10 ways German completely messes up your English
Photo: DPA

So you've mastered German, but now it's time to learn English all over again.

Iconic German church being eroded away by human urine
Ulm Minster towering over the rest Ulm surrounding the Danube. Photo: Pixabay

It will now cost you €100 to spend a penny. That’s if you get caught choosing to pee against the world-famous Ulm Minster.

German small arms ammo exports grow ten-fold
Photo: DPA

The government has come in for criticism after new figures revealed that Germany exported ten times the quantity of small arms ammunition in the first half of 2016 as in the same period last year.

14-year-old stabs 'creepy clown' in prank gone wrong
File photo: DPA.

A 16-year-old in Berlin decided he wanted to scare some friends, but his plot backfired in a violent way.

Four Ku Klux Klan groups active in Germany, says govt
An American member of the KKK at a gathering in Georgia. Photo: EPA.

The German government estimates that there are four Ku Klux Klan (KKK) groups currently active in the country, according to a report by the Süddeutsche Zeitung (SZ) on Tuesday.

Germany's 10 most weird and wonderful landmarks
Sponsored Article
Last chance to vote absentee in the US elections
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd