German Chancellor Angela Merkel on Sunday stood by her plan to levy a tax on nuclear power providers, pitting her coalition against industry in a turbulent return to government business after the summer lull.
The nuclear tax is one of a number of contentious issues facing Merkel, who has failed to capitalise on the strong recovery in Europe's largest economy to drum up support for her reforms, including budget cuts and an overhaul of the military.
Merkel said she was open to a suspension of Germany's compulsory military service, a topic of heated debate within her coalition, which has become notorious for its bickering.
Merkel hopes the nuclear tax will raise 2.3 billion euros a year as part of a 80 billion euro austerity drive that she is determined to press ahead with, keen to set an example of fiscal discipline for other eurozone countries to follow. "We have proposed a tax," Merkel told ZDF television in her first major interview since returning from her summer break.
"So long as there is no other proposal on the table, the tax remains." Merkel defended the tax plan after industry bosses and members of her own Christian Democrats (CDU) ramped up pressure on her on Friday to drop the plan.
Merkel, a former environment minister under Helmut Kohl, told ZDF her government was in talks with the energy companies about other potential proposals "but I don't yet see any".
Although the nuclear tax is part of the budget consolidation drive, Merkel's centre-right government is also preparing to unveil its long-term energy plans at the end of September. Surveys have long shown that most Germans oppose nuclear energy, making it a sensitive area for Merkel's government, which has pledged to extend the life span of nuclear power stations, even though it has yet to agree on how much.
Foreign Minister Guido Westerwelle told ARD television on Sunday that an extension of 10 to 15 years looked likely. With military reform on the agenda, Defence Minister Karl-Theodor zu Guttenberg is to present a plan for cutting costs and modernising the Bundeswehr on Monday.
Guttenberg is widely expected to favour a scheme that would see the army shrunk and mandatory military service suspended - against the wishes of others within Merkel's conservatives.
Merkel said she would support any proposals, which would safeguard the future of the Bundeswehr. "A re-think of the role of military service should not be ruled out," she told ZDF. Merkel and her government's approval ratings have sunk sharply since she was re-elected last year at the head of a new coalition of conservatives and liberals which has had to drop campaign promises of tax cuts and feuded over reforms.
A poll published last week showed Merkel's Christian Democrats had been overtaken by the centre-left Social Democrats for the first time since the federal election.
"I think we haven't managed to reach people partly because the confusion of voices and the way we have treated each other have not been what is to be expected of us," Merkel said. "This too will therefore be improved."
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