Merkel hard 8.5 billion of tax cuts for 2010

The new center-right government led by Angela Merkel won this Friday's first showdown managing to impose a package of tax breaks very controversial. After leading the revolt against the camps, the regional states Conservatives have finally adopted the plan to "stimulate growth" in the Bundesrat, the upper house of Parliament, by voting the 8.5 billion tax cuts promised by the Chancellor . These measures, intended to provide a boost to growth, will take effect from 1 January 2010.

The law includes an increase in family allowances, relief of estate costs and lower tax rates on value added tax (VAT) in hotels. The Chancellor and his ministers have negotiated hard these days to convince the heads of recalcitrant regional government by promising billions of euros in compensation.Including Saxony and Schleswig-Holstein, whose finances are particularly vulnerable by reducing taxes.

Reticence of "wise"

Failure before the Upper House would have been a blow to the government, in place since late October, and whose beginnings have been chaotic, marked by infighting and controversy. The Minister President of Hesse, Roland Koch (CDU) has welcomed this "step in the right direction.""This is an important signal showing that the L?nder black-yellow (conservative liberals) support the federal government black-yellow," he said.

The government of Angela Merkel has also exceeded the reluctance of the Court of Auditors and "wise", the government's economic advisers, and many economists, who consider irresponsible to offer tax breaks while Germany plans to contract a debt record 100 million euros in 2010. They also believe that these tax incentives will not impact on growth.

In its coalition agreement the Liberal-Conservative government of Merkel provides additional tax cuts of around 24 billion euros in 2011. Roland Koch prognostic already "talks tough and violent," to take the next tax cuts.

• Ireland: Sarkozy and Merkel will consult before the Eurogroup
• Draghi: Germany embarrassed by the report of Sarkozy
• Eurozone: Sarkozy household Merkel
• Crisis summit in Brussels to save the euro
• The Summit of the euro could be delayed