Schroeder promises tax relief

Opposition leader dismisses the SPD's poll manifesto as unconvincing

Luke Harding

BERLIN: Germany's struggling Chancellor Gerhard Schroeder on Monday tried to woo voters in the lead-up to September's expected election by promising more money for families and tax breaks for the middle class.

Franz Muntefering, the chairman of Mr Schroeder's Social Democrats (SPD), launched the party's election manifesto with the slogan ``Trust in Germany''. The party would fight the next election with Mr Schroeder as its candidate for Chancellor, Mr Muntefering said. ``Our key themes will be work, security, and humanity,'' he said.

Mr Schroeder had already revealed his most controversial proposal: a new top rate of tax for the rich. Anyone earning more than Euro 250,000 — or Euro 500,000 a year if married — would face a three percentage point rise, Mr Schroeder said last week, raising Germany's top rate of taxation to 45 per cent.

Preparation for poll

The manifesto's launch came after Mr Schroeder deliberately lost a vote of confidence in Parliament last week in an attempt to bring forward the election to September. Germany's President, Horst Kohler, now has to decide whether to allow early elections or to reject Mr Schroeder's move on the grounds that it breaches the Constitution.

If this happens, Mr Schroeder could resign, possibly next week. Or he could carry on as a lame-duck Chancellor until next year, when elections are due to be held.

With the SPD lagging 17 points behind the Opposition Christian Democrats, Mr Schroeder appears to be shifting his party decisively to the Left.

Mr Muntefering on Monday made little mention of the unpopular reforms that have led to the SPD suffering a series of disastrous election results. Instead, the party chairman said the SPD would increase Elterngeld, money for parents, with fathers or mothers receiving an entire year's salary if they chose to give up work to look after a new baby.

He also promised tax relief on work carried out in private homes or gardens.

The conservative Opposition leader, Angela Merkel, who is expected to replace Mr Schroeder as Chancellor, dismissed the SPD's manifesto as unconvincing. ``It is not based on the realities of Germany but [is] one which refuses to face these realities.''

CDU priority

The CDU has revealed few details of its election manifesto ahead of its release next week. On Monday, Ms Merkel said her priority would be to bring down unemployment in Germany, Europe's largest economy, which now stands at almost five million.

The CDU also wants to reduce income tax from 42 per cent to 39 per cent as part of an overhaul of the country's fiendishly complex tax system.

- Guardian Newspapers Limited 2005

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