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Merkel Slams Steinbrueck on Taxes, Debt Sharing as Vote Looms

Chancellor Angela Merkel slammed the opposition’s campaign platform as bad for Germany, as she sought to close down her main challenger Peer Steinbrueck’s chances of entering government after the federal election.

Merkel used a rally in southwestern Germany today to criticize Steinbrueck’s Social Democrats and their Green party allies over their plans to raise taxes and introduce a form of debt sharing across the 17-nation euro area. Without mentioning Steinbrueck by name, she portrayed his party as running on a platform of gambling away Germany’s future in the Sept. 22 vote.

“Whatever is redistributed must first be earned,” Merkel told the crowd in Rust, in Baden-Wuerttemberg state. “We have to stop living at the expense of the future.”

Merkel is stepping up her criticism of the opposition as she navigates the final stages of the campaign to determine who leads Europe’s biggest economy. With polls showing her lead over Steinbrueck’s party holding and her within grasp of a repeat of her current coalition with the Free Democrats, Germany’s first woman chancellor is pressing her advantage to win a third term.

“The election trend is still pretty cemented,” Jan Techau, director of the Brussels office of the Carnegie Endowment, said in an interview. “There may be movement in the margins but at this point it’s too late for the SPD to recover and form a government with the Greens.”

Merkel said a plan by the SPD and Greens to raise taxes was like “throwing a stick between the legs” of business leaders which would trigger slumping economic activity and falling tax revenue. “There will be no tax rises with us,” she said.

Support Drops

Support for Merkel’s CDU and its Christian Social Union Bavarian sister party dropped a point to 40 percent and her pro-market FDP coalition partner also fell one point to 5 percent in a GMS poll published today.

Steinbrueck’s SPD remained unchanged at 25 percent. The Greens party dropped one point to 11 percent and the Left Party gained a point to 9 percent support, according to the GMS poll.

This result, if repeated on Election Day, would mean Merkel’s CDU/CSU-FDP coalition would fall just short of a Bundestag majority with 45 percent. The opposition SPD, Greens and Left Party would also have 45 percent.

GMS surveyed 1,007 people Sept. 4-9. No margin of error was given. German voters cast ballots for members of parliament and parties and don’t directly elect the chancellor.

In a separate Emnid poll for Bild am Sonntag newspaper, Merkel’s popularity dropped two points as Steinbrueck’s increased seven points. Fifty percent of those polled said they want Merkel as chancellor compared with 35 percent who favored Steinbrueck, according to the Sept. 8 survey.

Left Warning

Merkel’s CDU is warning that the SPD and Greens may break a pledge not to ally with the anti-capitalist Left Party, the successor to former East Germany’s communists that wants to nationalize all big banks, ban hedge funds and raise taxes.

SPD and Greens leaders have vowed not to form any alliance with the Left Party at the national level. The SPD currently rules with the Left in the eastern state of Brandenburg and the state’s CDU leader said he thinks the SPD may break its promise after Election Day.

Steinbrueck, Merkel’s first-term finance minister, says the chancellor failed to address the rich-poor gap as the economy rebounded. He says an SPD-led government would introduce a flat-rate minimum wage of 8.50 euros ($11.25), enforce equal pay for men and women as well as for temporary workers and permanent staff, cap rent increases, raise taxes for higher earners and put a brake on electricity prices.

Merkel is campaigning on her record of tackling the debt crisis as well as her stewardship of the Germany economy, with joblessness near a two-decade low and the budget balanced. She says that SPD and Greens plans to raise taxes on the wealthier would harm the economy.

To contact the reporter on this story: Arne Delfs in Rust, Germany, at adelfs@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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