Seeking a successful result in the German elections this September, Angela Merkel has come out swinging at rumours that her administration will raise taxes. During her speech in Berlin on Tuesday, the German Chancellor claimed that tax increases would be ‘poison’ for Germany and its economy.
Germany has pushed the Eurozone forward in recent growth figures, with a recent 0.7 percent quarterly economic expansion making it one of the economic bloc’s top-performing large economies. Merkel has announced that he leadership would focus on resolving the European economic crisis by helping other European countries.
Despite her lead in polls throughout Germany, Merkel’s government, and the party that the leader belongs to – the Christian Democratic Union—has been challenged by the opposition Social Democrats. Peer Steinbrueck, the opposition leader, made pledges to raise taxes and impose a higher minimum wage for German workers.
Steinbrueck, who is running against Merkel, was previously Merkel’s Minister of Finance during the leader’s first term in power. Her government has supported a series of efforts to keep Germany’s tax rates at current levels and to limit any new legislation aimed at increasing wages or restrictions on employers.
Germany’s reasonably steady economic growth indicates that Merkel’s campaign is likely to be a success – a reality that’s supported by poll figures. However, a range of issues affecting Germany, including the long-term health of the Eurozone, could be major issues for her party going forward.
The Eurozone recently came out of its worst recession in recent history – a lengthy pattern of economic contraction that began in late 2011 and only reversed itself in the second quarter of this year. The Eurozone also experienced a more significant economic recession following the global economic crisis in late 2008 and 2009.
