CDU plays down tax hike talk

Thursday's edition of the mass-circulation Bild newspaper quoted the general-secretary of Chancellor Merkel's Christian Democratic Union (CDU), Hermann Gröhe (pictured above) as saying that increasing the top tax rate might be one concession that could convince the Social Democrats (SPD) to agree to enter a coalition.

Speaking to a group of CDU supporters on Thursday, though, Gröhe denied he had said any such thing.

"The report is wrong," Gröhe said. "We reject tax increases. The very good election result gives us a strong mandate to fight for this position."

Another leading CDU figure, Volker Kauder said there was no reason for his or any party to give up on any of its positions before coalition negotiations had even begun.

The finance minister in Merkel's last government, Wolfgang Schäuble, though, wasn't quite as definitive on the issue.

"We should see how the talks progress," Schäuble told the weekly newspaper Die Zeit. "I am personally of the opinion that the state does not require additional sources of revenue."

Despite the CDU's big victory in Sunday's general election, chancellor Merkel's bloc is five seats short of a majority meaning that the chancellor needs a coalition partner to govern. The CDU's preferred coalition partner, the liberal Free Democrats, failed to clear the five percent hurdle required to send parliamentarians to the Bundestag.

The only realistic possibilities are seen as the other major party, the Social Democrats, and the Greens. Both campaigned on raising Germany's income tax rate for top earners from 42 to 49 percent.

pfd/dr (Reuters, dpa)