Philipp Rösler, head of Germany's pro-business Free Democratic Party (FDP), called on his party members to stay calm in the face of catastrophic opinion poll figures.
A growing revolt within Angela Merkel’s centre-right coalition is threatening to torpedo the chancellor’s budget, with members of the pro-business Free Democrats warning they will block the budget without deeper tax cuts.
The prospect of quick and substantial tax cuts appears to be receding with a key government finance figure warning German taxpayers on Tuesday not to get too excited about future relief.
The centre-left opposition accused Chancellor Angela Merkel on Monday of trying to push through irresponsible tax cuts purely to give a leg up to her ailing pro-business coalition partners the Free Democratic Party (FDP).
Wolfgang Franz - chairman of Germany's so-called 'wise men' on the German Council of Economic Experts - has said that the government should balance its books before considering tax cuts.
The conservative Christian Democrats have hinted at tax cuts for low and medium income earners after 2012, even while the opposition Social Democrats insist there is no room for any reduction.