German Chancellor Friedrich Merz expressed his rejection of the idea of covering the budget deficit by increasing taxes.

In an interview with Germany’s ZDF channel, Merz said that the two coalition partners, the Christian Union (which includes his Christian Democratic Union party and its smaller sister, the Bavarian Christian Social Union) and the Social Democratic Party, agreed in the coalition contract, adding that “the coalition contract is in effect.”

Merz explained that the tax issue was extensively discussed during coalition negotiations, and he announced together with the Bavarian Christian Social Union leader, Markus Söder, that they would not sign any agreement that includes tax increases. Merz added, “The Social Democrats know that.”

He continued, “It is natural for the Social Democrats to have different views on this issue, just as we have different views on other issues. We are not looking for what divides us, but for what allows us to govern together responsibly.”

It is noteworthy that German Finance Minister Lars Klingbeil previously stated that he does not rule out imposing higher taxes on high-income earners and large fortunes to cover an expected budget gap in 2027 exceeding 30 billion euros.

Klingbeil said, “We will not exclude any option from the table.” The discussion on this topic began several weeks ago. It is worth mentioning that Klingbeil, who also serves as Vice Chancellor, is the leader of the Social Democratic Party, a partner in Germany’s coalition government.