Angela Merkel has been defending her new
government’s plans to cut taxes as a way to revive the economy.
The German chancellor has acknowledged it is a risky strategy, but said her opponents alternative of tough savings would damage the fragile recovery:
She said: “We’ve decided to follow this path 100 percent, for economic growth.” She added there was no guarantee it would work but that chances had to be taken.”
Critics say the move will increase the country’s debt levels and that it will not necessarily translate into a boost in consumer spending. It is still unclear how the government will fund the 40 billions worth of euros of tax relief.