Germany Up in Arms Over Minister's Holiday Comments

A typical reaction was the editorial in the Berliner Kurier

daily.

"There are two things you should never do to a German -- take away their car or cancel their holiday. These are two things they get very touchy about," it stated on Friday.

Last week was slow in terms of domestic news, anyway, with August being the monty of the traditional summer lull. But Finance Minister Peer Steinbrück should perhaps have known he would spark outrage with such comments.

"People are going to have to spend more on their old age and healthcare in future," he said in an interview with a magazine. "That means that we'll no doubt have to forego a holiday trip in order to put aside money for later."

"Germans without a holiday!"

The reaction was as swift as it was outraged.

"Do politicians want us to scrimp and save ourselves to death?" screamed mass-circulation daily Bild on its front page. "Germans are going to have to go without holiday! Taxes are rising. Everything is getting more expensive. Pensions are being frozen. And now politicians want our holidays."

In a country where six weeks' annual leave is the norm and whose citizens are probably the world champions in holidaying abroad, Steinbrück's comments could only cause a stink.

The tourism industry in particular was damning in its criticism.

Tourism industry not amused

"The only explanation that we can come up with for the finance minister's comments are that he himself needs a holiday to relax and come up with some better ideas," said Michael Buller, head of German travel website lastminute.com.

Steinbrück "is forgetting that tourism companies are an

important economic factor and employ a lot of people," he pointed out.

Indeed, the German tourism industry booked revenues of more than 185 billion euros ($237 billion) last year -- more than seven percent of total gross domestic product (GDP) in the eurozone's biggest economy -- with more than 2.8 million people employed in the sector.

And, despite constant fears of terrorist attacks since September 11, 2001, as well as the challenges posed by geopolitical tensions and potential health epidemics such as SARS and bird flu, tourism is still one of the growth industries in Germany, said the BTW tourism federation.

"Before telling people they should consume less, the government should first look at all the ways it can save itself," said BTW chief Klaus Läpple.

As successive governments have tried to steer the eurozone's biggest but at times most laggard economy back to growth, the electorate in Germany has had many a bitter pill to swallow in recent years.

Critics say government should scrap VAT tax hike

The previous administration under former Chancellor Gerhard Schröder prescribed many painful spending cuts and structural reforms.

And since coming to power last year, the new left-right grand coalition headed by the conservative Angela Merkel has not shied away from prescribing further belt-tightening measures.

One of the most controversial is the proposed hike in valued-added tax (VAT) from 16 percent to 19 percent from January 1, 2007.

Critics argue that the move will stifle the delicate flower of consumer demand, which is only recently showing signs of emerging from long years of torpor.

The chief whip of the liberal FDP party, Rainer Brüderle,

argued that Steinbrück should bin the plans for the rise in VAT.

"That will allow the economy to perform better and people would automatically have more money for their old age provisions," he said.

Gregor Gysi, a prominent member of the Left party, said: "If Steinbrück were to tax high-earning companies more fairly, then he wouldn't have to come up with such hare-brained ideas. The problem in Germany is not holiday, which millions of people can't take anyway, but politicians who begrudge them that holiday."

Top trade unionist Claus Matecki agreed.

"Millions of Germans are already having to forego their holiday because they haven't got enough money," he said.

The government was already digging deeper into peoples' pockets by way of the VAT hike and increased pension and healthcare contributions, Matecki argued.