Chancellor Angela Merkel has run into stiff opposition to promised tax cuts from powerful regional leaders in her conservative party who could block the measures in the upper house of parliament next month. Merkel, whose centre-right government has got off to a rocky start, told a group of conservative state leaders she would not bow to demands to compensate them for losses from new measures to cut 8.5 billion euros ($13 billion) in taxes for next year. “I'm not going to buy anyone off,” Merkel told the state leaders at a meeting in the chancellery, according to a report in Der Spiegel news magazine on Sunday. Just one month into her second term, Merkel was forced to reshuffle her cabinet Friday when Labor Minister Franz Josef Jung quit over charges he covered up details of an air strike that killed Afghan civilians when he was defence minister. Merkel's woes were compounded at the weekend when reports surfaced of the rebellion over her tax cutting plans by state leaders in her own Christian Democrats. Despite large deficits due to economic stimulus measures, Merkel agreed the cuts with her Free Democrat (FDP) partners after the September election. The CDU state premier of Schleswig-Holstein, Peter Harry Carstensen, threatened to resign over the dispute, German newspapers reported. Without his state's support in the upper house, Merkel's tax relief plans will not pass next month.
