German Chancellor Angela Merkel is expected to come under pressure to make changes to economy stimulus measures after an election in the western state of Hesse. The Free Democrats party emerged as the big winner in the vote and they are poised to form a coalition government in the regional parliament.
As the outcome also gives them additional votes in the federal upper house, Merkel urged the FDP not to use their new-found influence to block the package. The FDP, which favours small government and free markets, has said it will push for changes to ensure it contains deeper tax cuts and lower borrowing. The stimulus plan combines new investments in infrastructure with modest tax relief and measures to boost the car industry. The FDP party has criticised several elements of the plan. The result boosted hopes within Merkel’s Christian Democrats that a similar centre-right alliance may be possible at the national level after a federal election in September. That would allow Merkel to ditch her current coalition partner, the centre-left Social Democrats.