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Merkel faces attacks over cost of election pledges

Geir Moulson, Associated Press

German Chancellor Angela Merkel speaks during the Annual Reception of the SOS Children's Village organization in Grimmen, northern Germany, Friday, May 31, 2013. (AP Photo/Michael Sohn, Pool)

BERLIN (AP) -- German Chancellor Angela Merkel faced sharp attacks Friday over proposals that would increase government spending — pledges critics dismissed as blatant pre-election gifts that contradict her insistence on sound financial management.

Merkel's hard-nosed handling of the eurozone debt crisis, involving sharp spending cuts elsewhere in Europe, has helped her popularity at home. With Germany's own finances healthy, Germans haven't faced similar austerity.

Merkel's government last year even decided to increase childcare benefits and end an unpopular medical charge.

Polls give Merkel's conservative bloc a strong lead ahead of Germany's Sept. 22 election, although a parliamentary majority for her current center-right coalition is far from certain.

This week, Merkel set out proposals that appeared aimed at wooing centrist voters. They included increasing tax breaks for people with children and changes to pensions, which could cost billions. The Handelsblatt newspaper on Friday estimated they could cost up to 28.5 billion euros ($37 billion) — or 10 percent of the government's annual budget.

Juergen Trittin, a leader of the opposition Greens, said Merkel was offering "election gifts."

"Mrs. Merkel fears for her majority, so she's bringing into play credit-financed subsidies for higher earners," said Trittin, arguing the pledges jeopardize her government's stated aim of achieving a balanced budget.

"Merkel will not succeed in buying election victory with frivolous promises," said Carsten Schneider, a lawmaker with the Social Democrats, the other main opposition party. Plans to increase domestic spending plans while lecturing Europe about budgets means "she has lost credibility for good," he added.

Merkel's party, unlike the opposition, says it doesn't want to raise taxes.

The chancellor also faced fire from the Free Democrats, the pro-market junior partner in her current governing coalition, who have talked particularly tough on getting Europe's — and Germany's — finances in order.

"Mrs. Merkel's election pledges don't sound as though (her party) is seriously striving for a debt-free state," Christian Lindner, a prominent Free Democrat, wrote on Twitter. That shows his party is needed to provide a "compass," he added.

A top official in Merkel's Christian Democratic Union brushed aside the criticism.

"Solid finances remain a core task of politicians and a trademark" of the party, CDU general secretary Hermann Groehe said.

Merkel has frequently departed from conservative orthodoxy and reached out to centrist voters during eight years in power, for example by abandoning military conscription and speeding up Germany's exit from nuclear power.

Discussing her proposals during a phone-in event with party members this week, Merkel also proposed capping increases in rents, an idea the center-left opposition had first pushed.