German chancellor pledges tax cuts

The German chancellor has called for more public investment and tax cuts, as she launched her manifesto for the government to be reelected in the September general election.

'The question is: How can we ensure Germany emerges stronger once the crisis is over and the cards have been reshuffled in the world,' Angela Merkel told delegates in Berlin, reports the FT.

Her stance appears to contrast with her attempts to keep a tight rein on finances when other European countries were heavily involved in bailouts following the credit crunch.

Investing while cutting tax might be paid for with 'money we don't have', she added, with the only other alternative 'to keep our hands in our laps'.

'Of course, we will have to come back to a situation where we don't spend more than we earn. But in order to get there, we need to do two things: we must invest in the future, that is education and the environment.'

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