EZA 643 - Germany; tax estimate and 2005 budget - little respite for Eichel

12 November 2004

German budget – Eichel’s muddling through continues
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SummaryThe government budget draft following the Nov tax estimate still raises doubts, whether the tax-shortfall revealed in the estimate has been properly covered. As indicated by 3Q GDP release (+0.1% q/q) growth risks are on the downside, but the shift towards domestic demand is tax-positive. Broadening the tax base will remain a consensual objective, while lowering tax rates will remain contentious between government and opposition parties.

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© Graham Bishop