Germany moves right; big economic shift unlikely
Angela Merkel won a mandate to govern Europe's biggest economy with a new, pro-business coalition partner — but burdensome government debt from the financial crisis may put limits on proposals to cut taxes. Voters ended the conservative Merkel's unwieldy right-left "grand coalition" in Sunday's election and gave her a comfortable center-right majority — thanks to a strong performance by the business-oriented Free Democrats.Merkel now has a partner that fought for hefty income tax cuts in a bid to spur economic growth and would like to loosen laws protecting workers from dismissal. The Free Democrats also share her opposition to a national minimum wage and her desire to extend the life of some of Germany's nuclear power plants. The change was well received by German business.n the campaign, Merkel advocated only modest middle-income tax relief, a proposal well short of the overhaul the Free Democrats want — with big cuts to both top and bottom income tax rates. Germans' skepticism toward capitalism has grown over recent years, and "this makes a general shift in economic policy quite unlikely.
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