European Stars and Stripes (Newspaper) - October 1, 1990, Darmstadt, Hesse                                4� squaring off West German Chancellor Helmut Kohl left says the new Germany won t have to raise taxes to finance reunification. But his election opponent Oskar Lafontaine insists that Kohl is  to Force Germany to pay a big Price i a \. \ clarification of the right to buy property and cleanup of pollution at factory Sites. A fall these things will have to be paid for by the German government a he said a and  have to raise taxes to pay for  the tax question has triggered angry debate in Bonn. Oskar Lafontaine the social Democrat who is running against Kohl in the dec. 2 National election has repeatedly accused the government of concealing the True costs of German reunification. During a parliamentary debate sept 20, Lafontaine confronted Kohl on the Issue. A have the courage to say that you made a major mistake about the Cost of Unity a he told the Chancellor. Lafontaine a answer to the High Cost is a Short term a Solidarity tax for top earners. A an individual tax increase is unavoidable a a spokesman for the spa in Bonn said. A we want to take it from those who can afford it. We done to know yet How High this tax should be nor How Long it should be in effect until we have More information about the  Herta Daubler Gmelin a Leader in the spa said the top Eamer category could be a single person who earns $40,000 a year or a couple that makes $80,000 a year. But Daubler Gmelin said the category cannot be defined until the spa knows exactly How much the government needs to finance its plans. In addition to tax increases Lafontaine Calls for a cutting military spending by $6 billion in 1991 and making cuts the following years until the government can realize a saving of $17 billion a year. A using the entire $27 billion that formerly had financed costs associated with the division of the country. Those programs included the West German practice of buying the Freedom of East German political prisoners and a hard currency travel fund for East germans who travelled in the West. A confiscating the finances of the former communist party in East Germany and of All parties that formed a coalition with it. A postponing the governments planned tax break for top earners and corporations a move that would save $17 billion. Theo Taigel Kohls finance minister rejects Lafontaine a tax arguments. A one must first exhaust All other possible Money raising measures a Taigel said in a recent television interview. A one must restrict government spending by combing through plans in All the ministries to see if projects cannot be postponed for a year or two. Outside Bonn private economists Are conducting their own debate on the question. A study conducted by the Deutsche Bank in Frankfurt said taxes should be increased As a last resort. But if All other measures fail it by Helge Thiele and de Reavis staff writers West Germany will pay a big Price to bring East Germany a Economy from the Brink of ruin. The Only question is How big. A one of the greatest problems we analysts have is getting solid information about the True state of the East German Economy a said Minhard Miegel director of the Institute for Economy and social studies in Bonn. A we have to Correct ourselves daily with the latest information from East  despite such difficulties experts such As Miegel know where the Money needs to go. Poisoned Rivers must be cleaned up crumbling buildings must be rebuilt and thousands of jobless workers must be re educated. The experts and politicians have settled on one word to describe the Price of such expensive problems a a billion. But they can to agree on the number that goes before that word. Just like at an auction the Price of reunification climbs from source to source a the reunification treaty worked out Between the two Germany estimates the Cost at $27 billion in 1990 and $44 billion in 1991. In addition the new country will pay $9 billion to the soviet Union Over the next four years to finance the red army a pullout from East Germany. A Mic gel a Institute estimates reunification will Cost $53 billion to $66 billion a year for 1990 and 1991. A the economic division of the Deutsche Bank in Frankfurt puts the Cost at $66 billion in 1990 and from $80 billion to $87 billion in 1991. A Ingrid Matthus Maier the economics expert for the opposition social democratic party spa estimates reunification will Cost about $100 billion a year for 1990 and 1991. A Reinhard my Ritz an economist with the German Institute for Economy in Cologne said his Institute estimates that about $217 billion will have to be invested in the East German infrastructure Over the next 10 years. In the face of such a financial Burden the politicians in Bonn and the country a financial experts come to another disagreement How is the Cost of reunification to be financed the ruling coalition of Christian democrats Christian socialists and Liberal free democrats a claims private Industry will go into the East and pick up most of the Cost of rebuilding the country a Miegel said. Therefore Chancellor Helmut Kohls government has no plans for a tax increase. A the spa opposition claims private business wont Budge until several conditions Are met a Miegel said. Those conditions include repair of East Germany a deteriorating infrastructure Page 8 the stars and stripes special report a recommends postponing the proposed reduction in corporate taxes increasing the country a 14 percent value added tax to 15 percent and boosting the excise taxes on tobacco and gasoline. The increase in the value added tax would raise about $8 billion. An increase in tobacco taxes could produce $11 billion in 1991. An increase in the gasoline tax by 50 pfennig would bring in $37 billion. While the tax question hangs in the air the coalition government is borrowing Money to pay reunification costs. A the government Money borrowing process is to Issue Federal Bonds a a spokesman for the Deutsche Bank said. A it will also borrow Money directly from institutions such As Banks and insurance  the government plans to finance a a special German Unity fund until 1994 with borrowed Money and private investments for a total of $63 billion. The special fund will distribute its funds to the various government ministries and the five new East German states for such projects As roads Bridges telecommunication networks social Security pollution cleanup and re education. Matthaus Maier said the government by ignoring the need to raise taxes is driving the country dangerously deeper into debt. She said the governments plans for reunification and other projects will push its total debt from $670 billion to $800 billion. The interest on the $800 billion will Cost the government $66 billion in interest annually she said. A a the governments uninhibited policy of running up debts must come to an end a she said in a statement. The Deutsche Bank study also said the drastic increase in the deficit represents a major Burden. The Only Way to master the situation is to postpone other projects and or mobilize additional funds it said. Pris need to raise funds will boost interest rates which will produce a Strong Mark by lining foreign capital to Germany the Deutsche Bank spokesman said. But this policy has some potential problems he said. A the Mark becomes stronger but at the same tune it frightens off some potential borrowers. For this reason the government must be careful How Long the interest rates remain  unlike other experts Walter Vielmetter the spokesman for the Dresdner Bank in Frankfurt refuses to be drawn into the Cost debate. A we find the whole business of calculating the costs a Petty and shameful demonstration a Vielmetter said. A one  forget that our developing the East creates institutions and objects of lasting