Germany's Glos proposes $94 billion growth package

Germany's Economy Minister Michael Glos has proposed a package of tax cuts and higher investment worth over 70 billion euros ($93.82 billion) to boost German growth, ministry documents showed.
The measures, which include cuts to taxes that would take effect during the next parliament, were criticised by the Social Democrats (SPD), who share power with Glos's conservatives in the ruling coalition and control the Finance Ministry.
"The state and the economy are currently in a virtuous circle, which must be strengthened, not interrupted," Glos wrote in a letter to conservative and SPD lawmakers dated Monday.
Glos has previously called for the government to cut taxes to boost the country's resurgent economy, but his proposals were rebuffed by SPD Finance Minister Peer Steinbrueck.
Glos's proposal foresees spending around 20 billion euros from 2008 to cut public debt and boost investment. In 2009, it moots using 17 billion euros to fund cuts to mandatory social security contributions and raise investment. From 2010 to 2012, the package foresees another 34 billion euros worth of fiscal stimulation centred on tax cuts.
Germany's economy grew by 2.8 percent last year, its best performance in six years, and most leading authorities expect expansion to match or come close to that in 2007. Germany's next federal election is due in late 2009, and Chancellor Angela Merkel's conservatives have been well ahead of their traditional rivals, the SPD, in the latest opinion polls.
A spokesman for the SPD-controlled Labour Ministry said the plans were "highly theoretical", while a finance ministry spokesman said there was no room for tax cuts at present. However, Merkel's spokesman Ulrich Wilhelm said Glos was right to be planning ahead for Germany's future.
"I don't see anything worthy of criticism in the fact that within the scope of his own remit, the Economy Minister is sketching out the perspectives for the medium to long term," Wilhelm told a regular news conference.
The conservatives were forced into a coalition with the SPD in 2005 after failing to win enough votes to form a government with their preferred partners, the liberal Free Democrats (FDP).