Concern over German health-tax link

German financial market sources were expressing concern over the latest proposals of the Christian Democrat (CDU) parliamentary party head Volker Kauder to raise taxes to help fund the health service. Manfred Weber, director of the Federation of German Banks, the BVDB, said that a decision to move capital elsewhere would be "taken more quickly than it took the ink to dry on the draft legislation."

Other commentators said higher taxes would increase burdens and make Germany less attractive to investment. However, Mr Kauder's proposal has drawn support from within the CDU. The Prime Minister of Lower Saxony, Georg Milbradt, said there had to be a move from health fund contribution funding to taxation as high salary-related costs tended to reduce net income and the aim should be not to increase the total burden on individuals. The project aims primarily to help fund the cost of children's health care - around 14.0 billion euros ($17.19 billion) a year - through a modest rise in taxation.