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Merkel Slams Steinbrueck on Taxes, Debt Sharing as Ballot Looms

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German Chancellor Angela Merkel
German Chancellor Angela Merkel delivers a speech during a campaign rally in Rust, Germany, on September 10, 2013. Photographer: Thomas Kienzle/AFP via Getty Images

Sept. 11 (Bloomberg) -- 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 Sept. 22 election.

Merkel criticized Steinbrueck’s Social Democrats and their Green party allies at a rally in southwestern Germany yesterday over their joint 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 that would gamble away Germany’s future prosperity.

The chancellor is stepping up her attacks on 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 steady and within grasp of a repeat of her current coalition with the Free Democratic Party, Germany’s first woman chancellor is pressing her advantage to secure 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.”

Bavarian Campaign

Merkel is due to campaign today in Wuerzburg and Miesbach in Bavaria, where her Christian Social Union ally is vying to regain an absolute majority in a state election on Sept. 15 that will be a bellwether for the federal vote seven days later.

Steinbrueck will field questions from members of the public at 8:15 p.m. during a town hall broadcast live on ARD television two days after Merkel took part in a similar event.

Nationally, support for Merkel’s Christian Democratic Union and its CSU Bavarian sister party dropped one percentage point to 40 percent in a GMS poll published yesterday, as her pro-market FDP coalition partner also fell a point to 5 percent. The SPD was unchanged at 25 percent, the Greens dropped a point to 11 percent and the Left Party had 9 percent support, up a point.

This result, if repeated on Election Day, would mean Merkel’s coalition falling just short of a Bundestag majority with 45 percent, GMS said. While the opposition SPD, Greens and anti-capitalist Left Party would also have a combined 45 percent, Steinbrueck rules out an alliance with the Left. GMS surveyed 1,007 people Sept. 4-9. No margin of error was given.

Throwing Sticks

Merkel, who is campaigning on a record of shielding Germany from the worst of the debt crisis and her stewardship of the Germany economy, said SPD and Green plans 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.

Merkel’s popularity dropped two points as Steinbrueck’s rose seven points in an Emnid poll for Bild am Sonntag newspaper on Sept. 8. Fifty percent of those polled said they want Merkel as chancellor compared with 35 percent who favored Steinbrueck. Even so, German voters cast ballots for members of parliament and parties and don’t directly elect the chancellor.

The Social Democratic candidate, who was Merkel’s first-term finance minister, says the chancellor has failed to address a growing divide between rich and poor in Germany and bungled the energy transition to renewables from nuclear power.

He advocates a “redemption fund” to pool debt in the euro area as well as a form of “Marshall Plan” for southern Europe to create jobs and bolster economic growth, to be funded with the proceeds of a planned financial transaction tax. An SPD-led government would introduce a flat-rate minimum hourly wage of 8.50 euros ($10.94), enforce equal pay for men and women as well as for temporary workers and permanent staff, cap rent increases and put a brake on electricity prices.

Merkel’s present coalition with the Free Democrats leads Steinbrueck’s preferred alliance with the Greens by a combined 43-47 percent to 34-39 percent in the seven regular national polls. Add in the Left, and backing for the three opposition parties currently represented in parliament rises to 43-47 percent, equaling Merkel’s tally.

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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