Germany’s Franz Urges No Tax Cuts, Low Wage Demands, WiWo Says

Wolfgang Franz, head of German Chancellor Angela Merkel’s council of economic advisers, said the government shouldn’t cut taxes and urged labor unions to keep wage increases moderate, WirtschaftsWoche reported, citing an interview.

“Budget consolidation must have absolute priority,” Franz was quoted as saying. “Germany is facing several additional expenses as a result of the energy turnaround and potentially of a rescue of ailing euro countries.”

While productivity gains and inflation would allow wage increases of 2 percent this year and 2.5 percent in 2012, labor unions and employers should keep pay increases lower, Franz said, according to the magazine.

To contact the reporter on this story: Jana Randow in Frankfurt at

To contact the editor responsible for this story: Craig Stirling at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.