Merkel rallies party for election scrap
Merkel said that ditching Germany's unwieldy "grand coalition" was the best way to ensure the country emerged strongly from its worst recession in generations.Berlin -- German Chancellor Angela Merkel issued a call to arms to her centre-right party on Monday as she unveiled a manifesto she hopes will lead her to a second term in power with elections only 90 days away.
Speaking at the party convention of her Christian Democrats (CDU/CSU), she said that ditching Germany's unwieldy "grand coalition" was the best way to ensure the country emerged strongly from its worst recession in generations.
"We have the power to make our country stronger than it was before. We have the power to promote growth ... and we say, we can best do this with another coalition partner," Merkel told some 750 delegates.
Merkel hopes to get enough votes at the September 27 poll to jettison her current coalition partner -- the centre-left Social Democrats (SPD) -- in favour of the pro-business Free Democrats (FDP).
"I am deeply convinced that, with our unanimously agreed manifesto, we have the grounds to say to people: this is what we want," she said.
"Now it is about delivering our message to the people. So I call on you: let us fight so that we have a fabulous September 27," she added.
The centrepiece of Merkel's manifesto is a tax-cut pledge totalling 15 billion euros that would see the lowest tax bracket pared to 12 percent from 14 percent and the threshold for the highest tax rate (45 percent) raised.
She also vowed not to raise value-added tax if re-elected, despite several economists and some from within her own party calling for such a hike to plug gaping holes in Germany's public finances caused by the economic crisis.
She moved quickly to crush any hint of dissent within the party on the issue of tax, which had prompted front-page stories of a split in the leadership.
"We have spent enough time thinking," Merkel said pointedly.
Last week, Finance Minister Peer Steinbrueck said the recession had blown a "monstrous" hole in Germany's coffers, with the country expected to break EU deficit rules until 2013 or 2014.
Merkel said boosting growth must come ahead of fiscal consolidation, adding: "We have one goal and that is to pull our country quickly out of this slump so we can be strong on the international stage."
Other central planks of the CDU/CSU manifesto include a commitment to strengthen banking supervision in Germany and a pledge not to build any new nuclear power plants. The document also rejected the implementation of a minimum wage, favoured by the SPD.
The SPD hit back at Merkel's tax plan, with the secretary-general of the party, Hubertus Heil, dismissing it as "completely unrealistic."
The conservatives "are not telling the people how they will finance" their tax plans, he said, adding there would need to be "massive cuts" in public services.
The SPD has said it would cut the lowest rate of income tax but raise it for top earners.
Merkel's main rival in the upcoming election, Foreign Minister Frank-Walter Steinmeier, warned Monday that Germany's debt was "up to the limit of what is responsible."
Therefore "I don't see any leverage for tax cuts", the SPD candidate added.
Although the 54-year-old Merkel remains popular, polls suggest that a coalition between the CDU/CSU and the FDP will have its work cut out to clinch a majority, despite the SPD being in disarray following a drubbing in June European elections.
According to the latest poll for ARD television, support for the conservatives remains solid at 35 percent, compared to 24 percent for the SPD.
The FDP polled 15 percent of the vote and the Greens 13 percent.
The Die Linke party, a far-left outfit comprised of disaffected Social Democrats and former members of the communist party that ruled East Germany, scored 10 percent in the survey.
An editorial in the Tagesspiegel daily warned that Merkel's personal popularity might not translate into victory for her conservatives.
"The fact that most Germans like Merkel does not mean they vote for her party," the paper said on Monday.