A festering dispute in Angela Merkel’s center-right coalition worsened on Saturday when the chancellor publicly rejected a claim by one of her junior coalition partners that a tax cut proposal had been scrapped. Merkel said in a speech in Wiesbaden on Saturday that the center-right government was still aiming to cut taxes by 6 or 7 billion euros ($8.3 billion or $9.7 billion) in 2013, ahead of the next federal election, even though the Christian Social Union (CSU) allies oppose it.
“There’s no way that the plan has been taken off the table,” Merkel said, referring to the announcement on Thursday by Finance Minister Wolfgang Schaeuble and Economy Minister Philipp Roesler to cut taxes in 2013. Without the support of the CSU, which shares power with Merkel’s Christian Democrats (CDU) and Roesler’s Free Democrats (FDP), the tax cut proposal has no chance of succeeding. CSU leader Horst Seehofer has rejected the tax cut plan. The three party leaders met in Berlin on Friday evening to try to iron out their differences but failed to reach an agreement — other than postponing a decision until November 6. There were also conflicting reports on Saturday about what happened at the meeting as leaked to Reuters and other news outlets. In an unprecedented move, Roesler even retracted a comment he made in a newspaper interview with Bild am Sonntag to be published on Sunday. An advance of the interview was released on Saturday.
At first Roesler said Merkel “accepted the blame for the blunder about the coordination with Seehofer.” But Bild am Sonntag later said Roesler had withdrawn the word “blunder” and replaced it with “misunderstanding.” The messy dispute, drawing ridicule from the opposition that has dubbed Merkel’s government the “chaos coalition,” comes at a difficult moment for the chancellor ahead of crucial meetings on theeuro zone crisis on Sunday and Wednesday. Even though the amount in question — 6 or 7 billion euros in 2013 — is relatively small compared with the sums at stake in the euro zone rescue, media latched onto the unusually public row as a sign of the coalition’s demise amid sagging support. Sources close to Merkel dismissed on Saturday reports she had apologized to Seehofer that emerged from CSU and FDP camps for not informing him of the Schaeuble/Roesler tax cut plan.