Soeder backs Laschet as German chancellor candidate

The leader of Germany's southern state of Bavaria on Tuesday backed his rival Armin Laschet as the chancellor candidate of their conservative bloc to replace Angela Merkel after a general election in September.

"The die is cast: Armin Laschet will be the chancellor candidate of the Union," Markus Soeder, leader of the Christian Social Union (CSU) Bavarian sister party of Laschet's Christian Democrats (CDU) told a news conference.

"The CDU met yesterday and decided. We accept that, and I respect that," Soeder said, ending a damaging rift in the CDU/CSU alliance known as 'the

Union.' "I called Armin Laschet and congratulated him. I told him that we as the CSU accept it. We offered him our full support. We will support him without a grudge and with all our power."

Meanwhile, Austria's government is adjusting its forecast for 2021 tax revenue and public spending, leading to a bigger budget deficit as lockdowns crimp economic growth and force the government to expand assistance to hard-hit sectors of the economy.

Planned payments stand at 97.4 billion euros, an increase of 5.5 billion euros ($6.59 billion) compared to previous estimate, the Finance Ministry said on Sunday. Meanwhile, tax revenue is likely to come in 2.6 billion euros less than had been expected at 72.5 billion euros, boosting the forecast budget deficit by 8.1 billion euros to 30.7 billion euros.

Altogether, the general government debt ratio will rise 1.7 percentage points to 89.6% of gross domestic product, the government said.

"We're adjusting the budget to secure further resources for healthcare and economic aid," Finance Minister Gernot Bluemel said, adding the move follows budget revisions in neighbouring Germany and Switzerland. The action comes after Austria's Wifo institute, which provides forecasts for the government, said in March that in a "lockdown scenario" the country's GDP in the current year would grow only 1.5%, lower than an estimated 2.3% growth if lockdowns were lifted soon.