Germany's Merkel sees no extension to sales tax reduction

German Chancellor Angela Merkel said on Thursday a reduction in sales tax, announced as part of a 130 billion euro economic stimulus package, would only last until the end of the year.

"This is for me a cut off point," Merkel told ZDF television when asked if the reduction could be extended. "It is meant to give a short term impulse," she added.

On Wednesday, Merkel announced that VAT would be reduced from 19% to 16% for six months starting in July.