No tax hikes, vows Germany's Merz

German Chancellor Friedrich Merz said Sunday his coalition would not increase taxes, despite a growing budget deficit and calls from his governing partner to raise levies.

Finance Minister Lars Klingbeil of the Social Democrats has floated tax increases to plug a 30 billion euro hole in 2027 spending plans. But Merz's centre-right Christian Democrats have rebuffed the suggestion. He cited an excessive number of days of sick leave, stagnant productivity and high labour costs as factors weighing on the nation's competitiveness.