Germany Proposes Tax Cuts Again as Rest of Europe looks at Austerity

Germany’s planned tax cuts could stabilize domestic demand and help stimulate the European economy, Chancellor Angela Merkel said on Thursday, noting the country was feeling the effect of economic collapse in southern Europe.

“It is our job to stimulate the European economy, including with planned tax cuts,” she said at a press conference in Berlin with Hungary’s Prime Minister Viktor Orban.

“We are trying hard to continue growth and keeping domestic demand high to import goods from other euro zone countries,” she said.

Germany’s upper house of parliament in May rejected government plans to reduce taxes by about 6 billion euros, which the opposition said would be irresponsible at a time of budget consolidation.

Asked about a demand by the International Monetary Fund that Greece be given more time to meet bailout conditions, Merkel said she would base her judgment on the report by the “troika” of international lenders.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza