MADE IN GERMANY talks with Joachim Ragnitz about the economic development after the election and in East Germany.DW-TV: What are your expections from this new coalition? Joachim Ragnitz: Well, I suppose that people will see that reality is not the things that they promised in the election campaign, so I think most of the promises they made will not be fulfilled.   DW-TV: Well, let’s pick one promise in particular: tax reduction. Both the CDU-CSU and the liberal Free Democrats promised in their campaigns that they would reduce taxes. They didn't give an exact time plan yet. But what do you think? Will it be possible, and if so, to what extent? Joachim Ragnitz: It will be rather difficult, because they do not want to increase debt — that is, no deficits -- and they do not want to lower expenditures. So I do not see how to lower taxes then, and I suppose it may be in the long run, but not in the next year or so. DW-TV: But of course one of the main reasons why both parties said they have to do something about the tax system and reduce taxes was that it should be an incentive for businesses to produce more, to invest more, and in return, tax revenue would eventually increase, which would help us to get out of the crisis. If that is not an immediate measure, what else could they do? Joachim Ragnitz: Well, first, that is the story of the Laffer Curve that Ronald Reagan tried in the 1980s, and he was not very successful, because the deficit of the United States increased very much..." DW-TV: The trickle-down economy didn't work over there... Joachim Ragnitz: ... so I don't think that policy has much possibility of increasing growth in Germany. Most of the cyclical developments, of course, come from the foreign economy, that is, from abroad. We can work with tax incentives for research and development, for example... DW-TV: But that is long-term measures of course... Joachim Ragnitz: But in the short term we will not succeed anyway, I think. ...