Market Watch: Germany's 'wise men' blast Merkel tax cuts - by William L.Watts

For the complete report from MarketWatch click on this link

Germany's Council of Economic Advisers on Friday criticized the new government's plan to cut taxes, saying policymakers should explain how they will fund the cuts and provide a more detailed plan to exit stimulus measures already put in place. The report was a rebuke to an agreement by German Chancellor Angela Merkel's Christian Democratic Union and its new coalition partner, the Free Democratic Party, to implement 24 billion euros ($37.2 billion) worth of tax cuts over the next four years. Long known as the "five wise men," though it now includes one woman, the government-appointed council's annual report said the coalition plan "lacks a comprehensive exit strategy." "Comprehensive steps to reduce structural deficits are missing. Instead, the new government proposes a mix of tax cuts and spending measures," the council said. "The agreement is silent on how to manage the balancing act between fiscal consolidation, tax reduction and public investment.