Munich  - The national leader of Germany's employers assailed the government of Chancellor Angela Merkel on Wednesday, charging that it had switched from reforming the economy to handing out pre- election largesse.

In remarks prepared for delivery to an employers' conference at Rottach-Egern in Bavaria state, Dieter Hundt said the government's recent decisions had been inimical to job creation and dangerous to the welfare system.

He suggested the coalition between Merkel's Christian Democrats (CDU) and the Social Democrats had its eye on next year's general election and "counts more on spreading early election largesse than on structural reforms and investing in the future."

He criticized the Merkel government's decision to boost old-age pensions 1.1 per cent for 20 million Germans from this July 1, which is more than the legally necessary increase for the year.

The attack illustrates growing impatience in German business about Merkel, who was seen at her election in 2005 as committed to pro- business changes to the economic system and German laws.

Hundt called for compulsory unemployment-insurance levies on pay to be cut by half of a percentage point, saying this would benefit all workers and encourage companies to employ more people.

Tax cuts would not increase income for a quarter of workers because they already paid no tax, Hundt said. (dpa)