Merkel moots increased spending in boost for coalition talks

BERLIN - German Chancellor Angela Merkel said on Thursday that strong economic growth offered scope to further expand government spending, which could help her conservatives hammer out a coalition deal with the Social Democrats.

The government this week raised its 2018 growth forecast to 2.4 percent from 1.9 percent after bullish economic data, which could translate into added tax revenues.

That would give more leeway to increase state spending over the next four years beyond what is currently envisaged in coalition talks, and potentially lower taxes.