Olaf Scholz (SPD), Federal Minister of Finance. (picture alliance/Kay Nietfeld/dpa/archive)
German Finance Minister Olaf Scholz is opposed to instituting rapid tax cuts in support of the country's economy. "We do not need hectic measures now, but should instead astutely create the structural preconditions for additional growth," he told the newspaper Die Welt in comments published on Tuesday.
Investments in research and development are important, he said - that is why the government is launching for the first time ever a programme for companies featuring tax incentives for research and development.
But the president of the Ifo Institute for economic research, Clemens Fuest, urged the government to change course. "Germany is in a downturn and should the international trade conflicts grow into a trade war, it will drag down the local economy," Fuest told the newspaper.
There is an urgent need for action when it comes to tax policy, according to the Ifo head. "Politicians should not just watch as we fall more and more behind in terms of tax competition," he said.
With its corporate tax rates, Germany will soon take the lead among the world's seven largest industrialised nations. Also missing is "a consistent energy policy; instead, we are exhausting ourselves with individual measures that often do not fit together at all and push up costs completely unnecessarily," Fuest said.
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