German business leaders callfor corporate tax cut

14th March 2005, Comments 0 comments

14 March 2005, BERLIN - German business leaders called on Monday for corporate tax cuts and the loosening of tough laws on sacking workers in order to stimulate the economy and reduce record unemployment.

14 March 2005

BERLIN - German business leaders called on Monday for corporate tax cuts and the loosening of tough laws on sacking workers in order to stimulate the economy and reduce record unemployment.

Dieter Hundt, head of the Federation of German Employers (BDA), said corporate taxes of about 39 percent should be slashed by at least 10 percentage points.

The government, he stressed, needed to cut spending to deal with lower resulting revenues - not raise other taxes to make up for the losses.

Hundt repeated long-standing business demands that strict laws on dismissing employees be watered down.

German business says protection against sacking fuels unemployment because companies fear they will not be able to cut their workforce in a downturn. As a result, German employees clock up millions of hours of overtime.

Trade unions argue that protection from dismissal is a core right under the country's social market economy system.

German unemployment is currently at a record 12.6 percent with 5.2 million jobless - the highest rate since 1933.

Chancellor Gerhard Schroeder is expected to announce new moves to stimulate job creation in a major parliamentary speech on Thursday.

This will be followed by a meeting with leaders of the opposition conservatives - who control parliament's upper chamber - aimed at finding common ground for reform.

DPA

Subject: German news

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