The most vocal opponent to this increase is Guido Westerwelle, head of the FDP (Free Democrats or Market Liberals), who has said that there will be no tax increases with them in the administration.  He argues that this is unecessary and would stiffle consumer activity, thus hurting the economy.  Now, since it is very likely that the CDU will form a coalition with the FDP it seems that there is a conflict waiting to happen.

It is, however, very interesting that a lot of people in the FDP agree with the increase and the Westerwelle hasn't commented on the recently passed manifesto (he's on vacation, but that hasn't stopped him to comment before).  So my take is that all this talk is to position the FDP as the party that won't do tax increases, which is a very popular position in Germany, but will cave in the end.

As for the increase itself, I think it is sound policy if it goes along with radical slashing of unnecessary subsidies.  The problem in Germany is that the state is practically broke.  I think I read in a recent Spiegel that we pay 25% of the budget as interest for loans, but that number seems awfully large, so I might be wrong.

Also, it is important to remember that while the CDU wants to increase the VAT it wants to decrease other taxes.  I'll try to get a better picture of their manifesto, before I'll comment on that.