The German coalition government has agreed to a massive corporation tax cut worth €32 billion over four years in a bid to revive its flagging economy, with Chancellor Olaf Scholz declaring yesterday that the package – part of the new “Growth Opportunities Law” – will provide the necessary “big boost” to get the country on a path to growth. When even a left-of-centre led coalition of Social Democrats, Greens and the liberal Free Democrats are coming up with a growth plan based on tax cuts it emphasises the anti-growth nature of Rishi’s corporate tax hikes.
Germany was forecast to be the worst-performing leading economy this year. So far, it has seen no growth in the three months to June, and shrank in the two previous quarters. After a few weeks of inter-party squabbling, the coalition has finally realised how to fix it. Hint: it wasn’t through more inflationary spending. Finance Minister Christian Lindner instead pushed for tax cuts to “improve Germany’s competitiveness” and “give new impulses for growth“. Is His Majesty’s Treasury paying attention?