Industry leaders support Merkel’s tax cuts

Chamber of commerce presidents and industry associations have come to the defence of Berlin's tax cut plans following the harsh criticism from leading economic research institutes.

Industry leaders support Merkel's tax cuts
Photo: DPA

President of the German Confederation of Skilled Crafts (ZDH) Otto Kentzler expressed his approval of Chancellor Angela Merkel’s plan to cut taxes in the hope of stimulating economic growth.

Kentzler told news agency DDP on Saturday that he considered the proposed tax relief necessary to recover from this year’s economic downturn. But he did criticise the plan to reduce sales tax for hotel stays from 19 percent to 7 percent.

Hans Heinrich Driftmann, president of the German Chamber of Industry and Commerce, was similarly approving of the tax cuts contained in the Growth Acceleration Law, which only passed through the upper house of German parliament this month after considerable political wrangling.

“The Growth Acceleration Law removes a few very damaging elements of the business and inheritance tax reforms,” Driftmann said. “But the government should also address the problems of tax simplification and income tax rates.”

Mario Ohoven, president of the German Association for Small and Medium-sized Businesses (BVMW) pointed out that the new ruling coalition was obliged to follow up on its election campaign tax-cut promises. “That is why this coalition was elected,” he said. “If they tried to renege now, Angela Merkel and Vice-Chancellor Guido Westerwelle would destroy the faith the voters have in them.”

But even Ohoven had nothing but scorn for the cut in sales tax for hotels. “All the proportions are wrong,” he said of the idea.

Kentzler also said that such “isolated measures” would only lead to further problems of definition. Instead, Kentzler said it would have been better to install “fundamentally new yardsticks for the use of sales tax for goods and services.”

Meanwhile Driftmann gave a critical assessment of the new government’s work so far. “They seem to be losing momentum,” he said. “The politicians are getting bogged down in details instead of discussing the guiding principles of tax policy.”

He said that sales tax had dominated discussion on the Wachstumsbeschleunigungsgesetz, or the new law set to spur economic growth, even though it contained some important reforms that had been ignored.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Sleep, seaside, potato soup: What will Merkel do next?

 After 16 years in charge of Europe's biggest economy, the first thing Angela Merkel wants to do when she retires from politics is take "a little nap". But what about after that?

Outgoing German Chancellor Angela Merkel briefly closes her eyes and smiles at a 2018 press conference in Berlin.
Outgoing German Chancellor Angela Merkel briefly closes her eyes at a 2018 press conference in Berlin. Aside from plans to take "a little nap" after retiring this week, she hasn't given much away about what she might do next. Tobias SCHWARZ / AFP

The veteran chancellor has been tight-lipped about what she will do after handing over the reins to her successor Olaf Scholz on December 8th.

During her four terms in office, 67-year-old Merkel was often described as the most powerful woman in the world — but she hinted recently that she will not miss being in charge.

“I will understand very quickly that all this is now someone else’s responsibility. And I think I’m going to like that situation a lot,” she said during a trip to Washington this summer.

Famous for her stamina and her ability to remain fresh after all-night meetings, Merkel once said she can store sleep like a camel stores water.

But when asked about her retirement in Washington, she replied: “Maybe I’ll try to read something, then my eyes will start to close because I’m tired, so I’ll take a little nap, and then we’ll see where I show up.”

READ ALSO: ‘Eternal’ chancellor: Germany’s Merkel to hand over power
READ ALSO: The Merkel-Raute: How a hand gesture became a brand

‘See what happens’
First elected as an MP in 1990, just after German reunification, Merkel recently suggested she had never had time to stop and reflect on what else she might like to do.

“I have never had a normal working day and… I have naturally stopped asking myself what interests me most outside politics,” she told an audience during a joint interview with Nigerian writer Chimamanda Ngozi Adichie.

“As I have reached the age of 67, I don’t have an infinite amount of time left. This means that I want to think carefully about what I want to do in the next phase of my life,” she said.

“Do I want to write, do I want to speak, do I want to go hiking, do I want to stay at home, do I want to see the world? I’ve decided to just do nothing to begin with and see what happens.”

Merkel’s predecessors have not stayed quiet for long. Helmut Schmidt, who left the chancellery in 1982, became co-editor of the weekly newspaper Die Zeit and a popular commentator on political life.

Helmut Kohl set up his own consultancy firm and Gerhard Schroeder became a lobbyist, taking a controversial position as chairman of the board of the Russian oil giant Rosneft.

German writer David Safier has imagined a more eccentric future for Merkel, penning a crime novel called Miss Merkel: Mord in der Uckermark  that sees her tempted out of retirement to investigate a mysterious murder.

German Chancellor Angela Merkel forms her trademark hand gesture, the so-called “Merkel-Raute” (known in English as the Merkel rhombus, Merkel diamond or Triangle of Power). (Photo by Tobias SCHWARZ / AFP)

Planting vegetables
Merkel may wish to spend more time with her husband Joachim Sauer in Hohenwalde, near Templin in the former East Germany where she grew up, and where she has a holiday home that she retreats to when she’s weary.

Among the leisure activities she may undertake there is vegetable, and especially, potato planting, something that she once told Bunte magazine in an interview in 2013 that she enjoyed doing.

She is also known to be a fan of the volcanic island of D’Ischia, especially the remote seaside village of Sant’Angelo.

Merkel was captured on a smartphone video this week browsing the footwear in a Berlin sportswear store, leading to speculation that she may be planning something active.

Or the former scientist could embark on a speaking tour of the countless universities from Seoul to Tel Aviv that have awarded her honorary doctorates.

Merkel is set to receive a monthly pension of around 15,000 euros ($16,900) in her retirement, according to a calculation by the German Taxpayers’ Association.

But she has never been one for lavish spending, living in a fourth-floor apartment in Berlin and often doing her own grocery shopping.

In 2014, she even took Chinese Premier Li Keqiang to her favourite supermarket in Berlin after a bilateral meeting.

So perhaps she will simply spend some quiet nights in sipping her beloved white wine and whipping up the dish she once declared as her favourite, a “really good potato soup”.