A high West German official broadly hinted here yesterday that his government would be willing to consider a tax cut of nearly [WORD ILLEGIBLE]billion as part of a "package deal" at the economic summit in Bonn next month.
German Economics Minister Otto Graf Lambsdorff told reporters that each of the seven nations attending the summit would have to make a "contribution" to such a package.
President Carter, he said, would be expected to say by what alternative means his administration would propose to conserve energy if his legislative program fails in Congress.
The United States and other governments want West Germany to stimulate its economy, so as to provide a bigger market for their exports.
The West Germans want the United States to cut its energy use and imports, so as to reduce its trade deficit, which is depressing the value of the dollar. That, in turn, has raised the price and reduced the competitiveness of German and other foreign products in the United States, among other effects.
A German tax cut was first mentioned Monday in Europe by German Finance Minister Hans Matthoefer, who did not say whether it might take effect next Jan. 1, or a year later. Lambsdorff also left this question open.
He tied West German demands on the United States exclusively to energy, noting that "by 1985, everybody expects a dangerous scarcity, and it's high time for everybody to give attention to conservation."
In response to questions, he played down the question of rising inflation in the United States as a possible summit topic, aknowledging, nonetheless, that continued price increases here would cause problems "for the international monetary system."
Lambsdorff, who is coordinating summit planning for the West Germans, is here for a near-final round of conferences with American officials. His counterpart on the American side, Ambassador Henry Owen, is holding similar conversations in Bonn, and is due back tomorrow to confer with Lambsdorff.
Overall, Lambadoff struck an optimistic note on prospects for some solid achievement among the heads of state. "We in Germany think that we are condemned to have a success," he said. He explained that when heads of state meet, "for psychological reasons, they have to produce a success."
In earlier conversations, Owen has indicated something similar, saying he is hopeful of a summit "in which everybody gives and everybody gets" something.
But Lambsdorff advanced the presummit dialogue a notch by emphasizing the prospect for a tax cut of about 12 billion deutschemarks it the West German government gets assurances from the United States on energy, and a watering-down of trade protectionism from Japan, France and Britain.
A tax cut of that magnitude, Lambsdorff said "would not be as helpful as (thought to be) in international discussion." But he made plain that his government would seriously consider it in response to urgings from the United States and Western Europe that Germany expand its internal economy. A "very broad" internal discussion of the tax-cut possibility is still going on, he stressed.
official government forecasts are that West German economic growth will be about 3.5 percent in real terms this year, not enough to reduce unemployment or attract increased imports. But officials privately concede that they won't hit that target without new expansionary measures.
Lambsdorff said the West Germans would press Japan, Britain and France to abandon protectionist devices or liberalize their trade regulations.
And Japan, he said, must "very quickly" put forward improved trade and tariff concessions in the ongoing Geneva ultilateral trade negotiations, or the Europeans may be tempted to withdraw some of their proposals.