This package of measures consists in particular of raising the level from which the maximum income tax rate of 42% will apply and increasing the amount of family allowances, he said, stressing that the government was " forced to act" in the face of rising prices, particularly those of energy.

These measures are also intended to compensate for the "multiplier effect", or "cold progression", whereby a person experiences higher taxation due to a salary increase, obtained to compensate for the effects of inflation, which decreases its purchasing power.

If nothing is done, some 48 million people will face a tax increase from January 2023 due to this phenomenon, Lindner said.

"For the state, to benefit (from an increase in tax revenues) at a time when daily life has become more expensive (...) is not fair and also dangerous for the economy", he said. admitted at a press conference.

"For many people, daily life has become much more expensive. We fear an increase in the prices of gas, energy and foodstuffs", explained the minister of the coalition government of Olaf Scholz.

"Our country's economic outlook has also become more fragile and economic growth forecasts need to be revised downwards," he added.

Inflation reached 7.5% over one year in July, down from June but it is still at a very high level due to the war in Ukraine.

The government has already adopted measures totaling 30 billion euros to support purchasing power, including temporary measures to reduce household energy bills such as a "discount at the pump" and a "ticket at 9 euros" per month valid in all public transport except high-speed lines until the end of August.

But autumn and winter promise to be daunting in Europe's main economy due to the energy crisis "still to come for the economy", according to Economy Minister Robert Habeck, who predicts "a difficult winter ".

The Germans will see their heating and electricity bills soar in the fall with the government's decision to allow the passing on of the rise in energy prices to the end consumer.

Berlin expects a 2.2% increase in German Gross Domestic Product (GDP) this year, but the Bundesbank, the central bank, is more cautious with an estimate of 1.9%.

Growth remained flat in the second quarter, weighed down by the acceleration of inflation in the wake of the war in Ukraine.

This is one of the poorest performances in the euro zone from April to the end of June.

This deadly conflict, which began on February 24 with the invasion of Russian troops, put an end to the rebound in economic activity that began a year ago after the historic recession caused by restrictions linked to the Covid-19 pandemic.

© 2022 AFP