| ||
| ||
| ||
 |
|
|
|||||||||||||||||||||||||||||||||||||||||||||
Schroeder spells out tax cut plans
(CNN) -- German Chancellor Gerhard Schroeder has outlined plans for wide-ranging tax cuts in an effort to lift Europe's biggest economy away from recession. Each person will pay on average 10 percent less tax from January 1, with other breaks for medium-sized businesses, which will boost demand for goods and services within Germany, he told the parliament Thursday. With his Social Democrats having fallen in opinion polls, Schroeder is staking his job on the success of his long-term reforms, called Agenda 2010, which he says will save 54 billion euros. He warned that there would be arguments ahead but said: "We have to make an effort together to find a constructive solution. Without a strong Germany, Europe is weaker." Schroeder spent 10 weeks planning his strategy, which was approved by his cabinet at the weekend. With some economists fearing a straight year of recession for the first time since 1993, Schroeder is desperate to trigger growth and lower unemployment -- without breaking European Union budget rules which say that deficits must be less than three percent of gross domestic product. Germany broke that limit in 2002 and a similar performance this year could lead to fines from the EU. At the weekend, Schroeder said tax cuts, brought forward a year, would be financed by subsidy cuts, new borrowing and possibly revenues from the sale of shares in former state monopolies. The new cuts will lower the top rate of income tax to 42.0 percent from 48.5 percent and the bottom rate to 15.0 percent from 19.9 percent. "To give the economy a shot in the arm is a good idea but there are problems with financing tax cuts," Klaus Baader, chief economist at Lehmann Brothers told CNN. Schroeder started his speech by condemning Silvio Berlusconi after the Italian prime minister compared a German legislator to a Nazi concentration camp commander. Schroeder said he expected Berlusconi to apologize. (Full story)
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
