German Economics Minister Favours Tax Reductions

by Ulrika Lomas, Tax-News.com, Brussels

22 December 2008

Designed to achieve a unified economic and political response to the prevailing global economic crisis, a national summit meeting, held between the German government, business leaders and trade union representatives, merely served to highlight the increasing rift emerging within the Coalition itself, as Economics Minister Michael Glos relentlessly called for urgent tax cuts.

During the crisis meeting, the German government unveiled plans to announce a second economic stimulus package in January 2009, aimed at strengthening investment in infrastructure, pivotal to reviving the flagging economy.

Although the precise timeframe for implementation of the new program is as yet unclear, Glos remains convinced that the plans should include a series of tax initiatives, alluding to the increasing number of coalition members now favouring this course of action.

Calls for urgent tax cuts, long since championed by Horst Seehofer, Chairman of the Christian Social Union party, have, however, up until now been vehemently rejected by its sister party, the Christian Democratic Union of Germany, and by the Social Democratic Party (SPD).

Finance Minister and SPD member Peer Steinbrück continues to oppose the moves.

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