German Chancellor Angela Merkel has disappointed EU partners and surprised even her own conservative Christian Democrats (CDU) by refusing to deliver tax cuts now to help stimulate economic growth.

There is a simple reason - votes.

Ms Merkel faces a tricky election in September and by promising tax cuts after the ballot, she wants to ensure voters give the credit to her - and not to her main rival the Social Democrats, with whom the CDU rules in an awkward grand coalition. "The essential truth is Ms Merkel wants to make sure the CDU gets all the credit for cutting taxes when the election comes," said Karl Doemens, a columnist for the Frankfurter Rundschau newspaper. "She is reacting with tactics. She's not leading."

Gero Neugebauer, a political scientist at Berlin's Free University, said Ms Merkel was also scoring with arch-conservative voters who applaud her refusal to spend more to stimulate growth, even though France and Britain are pressing her to do more.

"She's winning over the nationalist voters who believe that she's putting German interests first," he said. "She knows she can't go wrong by doing nothing because nobody knows what's going to happen and doing nothing is better than action.

"She's trying to convey a sense of security, like the Germania statue - only without the long hair, the armoured breastplate, the shield and the sword," he said, referring to the 19th century figure representing the nation.

Already in recession, Germany has unveiled stimulus plans worth €31 billion or 1.25 per cent of its gross domestic product, to tackle the effects of the global economic crisis.

That is more than the 1.2 per cent the European Commission recommended this week as part of an overall fiscal boost of some €200 billion for the 27-nation EU as a whole.

But despite a strong budget position, Berlin has refused to lower taxes - unlike for example Britain, which this week cut sales tax by 2.5 points to 15 per cent in an attempt to persuade consumers to spend more.

Ms Merkel pointedly underlined the differences with her EU partners when she said on Monday that Germany would not be drawn into a "senseless competition" to spend billions of euro.

Hans Vorlaender, political scientist at Dresden University, said there is some truth in her argument that she needs to save the tax cuts in the event the economic downturn worsens.

"But she also clearly needs an ace card up her sleeve for the election," he said. "She doesn't want to play her cards too soon and end up with nothing to offer for the election."

MsMerkel managed to keep the CDU behind her at a two-day party congress this week in Stuttgart, taking a page from the playbook of her mentor Helmut Kohl by stifling the tax cut debate in closed-door meetings before the congress began.

She gave what many delegates and newspapers called the most uninspired speech of her career, yet still won 95 per cent support from 1,000 delegates for two more years as party leader.

"We have to have the courage to swim against the stream for a change," Ms Merkel said, explaining why there would be no tax cuts before the September 2009 election.

"The CDU is two-faced," wrote Nikolaus Blome, columnist for best-selling Bild daily. "Nearly everyone voted for Ms Merkel despite a dull and disappointing speech that moved no one."

Mr Blome, who said many in the CDU want lower taxes now, added it showed the party is again a "rubber stamp instrument" blindly backing the leader to stay in power, as it did under Mr Kohl.

"There's a lot of resistance to Ms Merkel's course to delay any tax relief," the conservative columnist said. "But the CDU has always stood disciplined behind their leader before elections."

The Express in Cologne said: "Ms Merkel is already known as Madame No in Brussels. You would wish that she had a bit more courage and would take the stage like Barack Obama and say 'Yes, we can' instead of giving us a nasty scowl and 'No, we can't.'"

Ms Merkel, who despite a 10-point lead over the SPD in opinion polls has not forgotten how she nearly squandered a similar big lead in 2005. She has also drawn criticism from French President Nicolas Sarkozy.

On Tuesday, French Economy Minister Christine Lagarde appeared to be talking about Ms Merkel when she told Direct Soir newspaper: "Everyone has to play ball.

Ms Merkel may be losing her reputation as a leader in Europe for her hesitancy to act. But she has not lost her humour.

"What's the difference between Communism and Capitalism?" she joked at a recent cabinet meeting, according to Focus magazine. "Communists nationalised companies first before ruining them."

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