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Merkel stands by disputed tax cut plans

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Merkel stands by disputed tax cut plans
Photo: DPA
09:13 CET+01:00
Chancellor Angela Merkel on Thursday defended her coalition's controversial tax cut plans and said she would stand by her promise to overhaul Germany's tax system in the coming years, financial daily Handelsblatt reported.

“I will not put the reform of the tax system in question,” she told the paper. “It will likely be implemented within 2011 according to the coalition contract. ”

Recent polls have shown that the majority of Germans oppose the tax cuts agreed upon by the new centre-right government coalition between Merkel's conservative Christian Democrats (CDU) and the pro-business Free Democrats (FDP).

The coalition only narrowly succeeded at passing €8.5-billion in tax relief in December because states said they could not afford the lost revenue. But the government has made no secret the package is just a taste of larger cuts planned for the coming years.

Meanwhile some economists have said the country's dire finances cannot handle the new fiscal measures.

Merkel also stood by proposed changes to tax brackets proposed by junior coalition partners the FDP.

“It is widely undisputed that our tax system must be easier and fairer in many ways,” Merkel told the paper.

She also defended the Free Democrats, saying they had not changed their goals after being elected.

“The clear committment from Chancellor Merkel underlines the agreements of the coalition agreement,” FDP parliamentary group leader Birgit Homburger told daily Frankfurter Rundschau on Thursday.

The CDU plans to solidify the 2011 tax reform plans at Friday's party convention, sources told business daily Financial Times Deutschland.

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